Channel trading, trend trading, and the importance of never trading based on one factor

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Free Forex trading system that works

Financial markets shouldn’t be traded without a sound tried and tested trading system, and ­­ the Forex market is no exception. Making the right trading decisions and finding tradeable setups on the market all depend on the rules of your trading system. Without a well-defined system, entering the market would more resemble gambling than trading, which significantly increases the chances of blowing your account in the long-term.

Given the importance of trading systems in Forex, let’s cover what trading systems actually are and what the benefits of defining a trading system as a part of a comprehensive trading plan are. In addition, we’ll show you a simple Forex trading system that works, based on high-probability price action setups on higher timeframes. Let’s get started.

What is a Forex trading system?

A Forex trading system is a set of rules which define how you’re trading the market. It should include all important points which could potentially affect your trading performance, such as a complete set of rules for identifying trade setups, risk and money management guidelines, types of analysis in changing market conditions, and a way of managing your open positions.

A well-defined trading system is like a road map for the financial market. Without a map, you would likely be lost in the wilderness of erratic price movements and place trades based on emotion, rather than your ratio. Since trading is a highly analytical discipline, hitting the market without a map doesn’t seem like a wise decision.

Benefits of having a trading system

Besides the set of rules which define all actions taken on the market, having a trading system also has some additional advantages which cannot be neglected. First and foremost, trading on strict and detailed rules as a part of a trading system prevents you from placing emotional trades and increases your discipline.

Emotions, such as greed and fear, are well-known enemies of rational trading which often attack beginners – mostly those who don’t have a detailed trading plan. As a result, greed and fear interfere with your trading decisions and cause you to chase the market for trading opportunities, even if no setups exist. Your mind will try to convince you to take a trade in the hopes of obtaining potential profits, without taking into account the risks associated with the trade. Fear, on the other hand, often leads to closing a profitable position too early and letting your losers run, in the hopes that the price will reverse to break even. When using a trading system with strict rules, these mistakes can be easily avoided.

Trend-following trading system on higher TFs

One of the best Forex currency trading systems are trend-following systems which aim to take trades only in the direction of the underlying trend. This way, riskier counter-trend trades based on price corrections can be avoided, and price corrections are only used to enter with a market order when prices are relatively oversold during uptrends, or relatively overbought during downtrends.

This system uses higher timeframes, such as the 4-hour, daily, and weekly timeframes, and utilises a multi-timeframe analysis to identify the overall market trend.

Chart patterns are also an important part of the system, since these patterns are often used to find tops and bottoms of trends and to identify potential trend continuations.

To enter with a long position, all three timeframes (weekly, daily, and four-hour) need to align and to show an uptrend. This might require some experience, as some of the timeframes may contradict each other, even though the overall trend is still intact.

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1) The weekly timeframe needs to form higher highs and higher lows during uptrends, and lower lows and lower highs during downtrends. The weekly timeframe is only used to identify the overall trend in a currency pair, not to spot entry and exit points.

2) The daily timeframe needs to show a tradeable setup, based on price action tools such as channels, trend lines and chart patterns. All of the tools should confirm a trade in the direction of the overall trend, as shown on the weekly timeframe. Fibonacci retracement tools also play an important role in this system, as we want to buy low and sell high. Multi-timeframe analysis is extremely important, as an uptrend on higher timeframes may look like a downtrend on shorter timeframes.

If the daily chart is in a downtrend, but the weekly shows an uptrend, make sure to draw a Fibonacci retracement tool to identify the potential levels where the correction might end on the daily timeframe. Everything between the 38.2% and 61.8% Fib retracement levels can be a good point to enter in the direction of the overall trend.

3) Finally, zoom-in to the 4-hour chart to find potential entry and exit levels for the trade, as well as stop loss levels. Recent swing highs and swing lows, horizontal support, and resistance levels, channels, and trend lines (from the daily timeframe) can all point to levels to enter into the trade. Since a complete trading system also factors in risk and money management, make sure that your trade setup returns a satisfying reward-to-risk ratio of at least 1 or preferably higher.

Back-test your trading system

As always, it’s extremely important to back-test any Forex trading system before putting it to work on a real account. Simply scroll your chart to a previous period and disable the function “Scroll the chart to the end on tick incoming” (if you use MetaTrader 4/5).

This will prevent the chart from returning to the most recent date with each change in price. Once you scroll the chart to a previous period, try to find trade setups that align with the rules of the trading system described above and analyse how they would have performed. It’s a good idea to keep a trading journal along the way and make regular retrospectives of each trade to find the best performing setups. Make sure to back-test dozens, if not hundreds of trades in order to get familiar with the trading system, before moving on to a real account. This will ensure that you trade only with Forex systems that works.

Diversified Trend Trading Approach

Warning. he or she that dares to enter this thread will be sent on a perilous journey into science and the mind. This is a journal of trend followers. A strange divergent species that exist in the trading world who think to much, luv the scientific method, listen to too much music and like the sound of their own voices. Enter with care. You have been warned.

To get the ball rolling. this video is mandatory.

Update – 2020 Resolution – A Change of Direction into the Land of Fun

Ok guys. The New Year brings a few changes to the direction of this thread. I would prefer to see this thread become much more of a discussion thread regarding all things trendy (divergent) and diversified. The gloves are now off and we can create a bit of chaos here. so let’s see if we can raise the tempo with participation and make this less of a one way diatribe from a few die-hard trend followers.

Over the 2020 year I will be winding down my efforts a bit on this thread and increasing the sporadic brain farts and anything that catches my eye that might be a bit relevant to the general topic of diversified trend following. I would prefer that this thread remains active and is not relegated to the archives from a general lack of participation.

The only rule that we should abide by is a general respect for all participants here and the need to keep things positive and fun. Of course fun posts of general nonsense will be encouraged as well as mandatory music inclusions. Let’s turn this into a fun place as opposed to a public library :-)

. and the best for the New Year to all of you.

Below is the original intro to this thread. but things have moved on considerably in this thread’s evolution from it’s original intent.

I have been a lurker on this forum for quite a while and have been looking at the pro’s and con’s of sharing my trading approach with everyone here. Bottom line is that I wish to collaborate with the community as I have seen some very worthwhile contributions in some of the threads I have visited, particularly those from the trend following camp who have spared the time to spread the jubilation that sustainable trading for a living can bring.

I am particularly excited with the robustness of the strategy referred to as the Diversified Trend Trading Approach or DTT, as I have been involved in trading for the better part of my life both in the operation of a small fund and in areas of compliance relating to fund management and have seen and experienced first hand a lot of false hopes. Experience has taught me to avoid Martingale’s no matter how they are hedged (I was a past Martingale addict and once you are one, it is incredibly hard to pull yourself out) and I also avoid aggressive pyramiding into trades. On Martingales, the key is a regular harvest and the need to ensure you only allocate a small percentage of your trade capital towards them, as you just never know when or even if that day will arrive, no matter how clever you structure your progression. The market has this unnerving ability to sniff out the weaknesses in your creation.

If I was asked, what are the merits of this approach and why does this strategy deserve any attention, then the simple response is this. and trend traders have all heard it before. A single instrument may experience only a small number of significant trends over a defined extended period. On a D1 chart, maybe as little as 2-4 times a year. A trend trader wants to be on these trends as this is his/her bread and butter. but they also want to avoid or minimise false starts . so to increase your probability win rate, you need to focus on confirmed trends of substance, and keep control of your trigger finger. and if your living is dependent on your approach, you want to control your behaviour to prevent overtrading as soon as you sniff a trend.To improve trade probabilities, reduce lumpy cashflow and diversify risk, you also need to keep watch over a large number of diversified instruments so you can afford to be selective in only choosing those trades that ‘scream out to you for action’. and you want to strictly control your risk to keep you in the game, pay those bills and keep your family happy. This approach seeks to address these important issues faced by a trend trader.

Warning. Ifyou are new to the game of trend trading then I strongly suggest you spend considerable time backtesting, forward testing, trialling a demo account on a single instrument before you launch into multiple instrument trading..and before you even think of going live..not that multiple instruments pose any significant different nuances. but rather that it is essential to understand how to trade trends first before you attempt to diversify. Managing multiple instruments is only going to compound your problems if you are not fluent at trading trends on a single instrument. Your hands will be flying everywhere, your screens will bear witness to grimaces of pain and torture. and your pets will be steering clear of you. This thread should not put you off participation but I strongly advise that you do the hard yards and earn your certificate first. for you could very well be swearing at me in later posts. and I can always refer you back to this original section of the first post, without having to say I told you so directly.

Note regarding the use of correlation and trend strength measures as filters for the strategy. Despite the power of these tools for trend trading strategies in general, I tend to disregard these filters as their inclusion significantly reduces the number of available trades. I recognise the importance of these measures if trading a narrow range of instruments, but given the diversified nature of this strategy, my backtest concludes that they are not necessary. at the moment but may alter in the future as this strategy is honed (as discussed later). What is the critical determinant as a filter for this strategy is whether or not a trend exists with the instrument.

I have a very low risk tolerance and to be perfectly honest with you all, I am not a very good trader. however my strength, in my opinion at least, lies in risk management and system design. I have been through many trading phases in my life looking at various systems including working with a programmer on a host of EA’s, but inevitably find that conditions in the market change thereby rendering these different approaches to the dustbin. meaning that these approaches failed the robustness test in that a truly robust system needs to weather all market conditions.

Given that in the next few years I will be returning to full-time trading for a living my focus has been on the development of sustainable trading systems that focus on capital preservation and income yield. and here we are today.

To be clear, I have not commenced trading this strategy as I lack sufficient available capital at the moment to commit my livelihood towards this venture. Furthermore, despite the relatively low trade frequency, this strategy is for a team that are prepared to operate 24/5 in shifts. I have time on my side to get this all cracking if this strategy stands up to intensive scrutinisation.

What I have done however over the past year or so is extensively backtest and forward test it over the past 688 calendar days commencing 1 January 2020.

Some guidelines for the Strategy:

  1. Obviously different trading strategies suit different personalities. This strategy may appeal to those seeking a trend trading strategy backed up with a solid risk management approach.
  2. I use IG Markets as my preferred platform as opposed to MT4 due to the excellent advanced charting package provided that assists in managing a diversified portfolio, plus the vast array of products which IG offers that can be traded from currency pairs to indices and commodities. The strategy is currently configured to actively monitor 24 products and a user friendly charting interface with comprehensive trading alerts is essential. It works well on MT4 but can become a pain in the neck when speed of execution is required. but of course it is your choice. I just thought I would mention what I use.
  3. I have not been successful developing an EA for this strategy as the determination of the trend is not timeframe dependant which makes programming difficult. Significant decision making needs to be made at D1, W1 and M1 levels Maybe there is a talented individual out there that might want to see if they can convert this into an EA. My feeling is that this approach will only ever be semi-automated at best given the discretionary nature of trend determination with the mechanistic nature of trade management.
  4. Despite my lack of success in developing an EA for this, I have removed human discretion at H1 TF where possible.
  5. An initial stop is always placed on each trade but immediately following stop execution, the standard deviation channel becomes your exit mechanism so you rarely hit your initial stop. As a result, time in trend is your friend as each bar of progression reduces your loss factor. The standard deviation channel is used to manage the trade at all times.
  6. My maximum risk tolerance is 0.5% risk per trade but this does not stop others from magnifying this amount if they are prepared to strike for a higher return. For example, a 1.0% risk per trade doubles returns but also expect an associated doubling of associated risk parameters such as the drawdown. I actually feel that this approach could handle a bit of aggressive risk management so based on current results, a 1.00% risk per trade would be regarded as perfectly acceptable as it is unlikely to keep you awake with cold sweats.
  7. For the DTT I use a daily chart to determine if a trend is in place with a standard deviation channel (1.0 std dev’s) to confirm the trend and it’s significance, and then I go to the H1 timeframe to redraw the trend from the D1 commencement point again using a standard deviation channel of 1.0 std dev’s, and then wait for a Donchian breakout, or jump in immediately if it has just occurred using a 40 period Donchian on the H1. I know I don’t spend much time discussing support and resistance levels which is a key requirement for trend trading, but this is where the Donchian comes into play by visually confirming that at least in the short term, following a breach, you will be trading in blue sky. Identification of support and resistance is a key step in your analysis on the D1 timeframe in identifying entry points and periods of congestion, but I don’t think I need to go into this much in this thread as there are many other threads that do a better job of this.
  8. Upon (or just before) breakout of the Donchian on H1 timeframe, immediately redraw the standard deviation channel from the commencement of the trend (on D1) to the bar immediately preceding the entry bar. The lower or upper standard deviation channel (dependant on trend direction) determines your initial stop distance = R.
  9. If I achieve 2.5R profit I redraw the trend on the H1 timeframe using a standard deviation channel of 0.5 standard deviations to further confine the trend boundaries and ensure not too much profit is taken off the table before an exit.
  10. Note that this strategy does not pick the highs and lows of a trend and tends to execute when the trend is well established and never achieves maximum profit potential.
  11. Using these rules you will ensure you are always in the direction of the daily trend.
  12. Note that I do not use price action signals such as pin bars, engulfing patterns etc. I simply use the Donchian breakout on H1 to keep things simple for me. This is necessary as I watch a large portfolio and cannot afford to be too detailed in my trend assessment.
  13. Also as I am not using traditional price action patterns I therefore use a bar chart as opposed to candlestick charts to keep things clean, decision making fast and avoid letting my brain override the technique.
  14. Note that I use the standard deviation channel to define a trend and do not use the classic trend definition methodology of a sequence of highs or lows. The reason for this is that a standard deviation channel is defined using the entire data set as opposed to say 3 or more points in a trend. The basis of this methodology is that I am looking for consistent trend patterns across the entire timeframe I am using. This helps me to validate those trends moves of more regular nature as opposed to those trend moves that may be biased by a few bars in the set. Furthermore the use of the standard deviation channel removes human discretion that is often present in drawing trends. For example, give the same chart to different people and they frequently draw different trend lines. This is avoided through the standard deviation channel method provided you draw the channels from the lowest point in the trend to the highest point in the trend. Another reason the the std dev channel is that I use it as a linear regression tool to define the slope of the trend.
  15. When in a trade, always redraw your standard deviation channel when a new high is made (for a long) or a new low is made (for a short). It is essential that when new data is added, the standard deviation channel is redrawn as this manages risk on your trade as it progresses.
  16. Note that use of the standard deviation channel effectively acts as a trend volatility measure like an ATR. For example volatility prior to entry will result in a wide std dev channel prior to entry. As a result your R will be wide reducing your position size for your level of risk tolerance.
  17. Losses are a fact of life so expect them. Fortunately this strategy strictly manages those losses and through diversification attempts to reduce drawdowns, so let the strategy take care of them. do not attempt to second guess. Just keep in your mind that you only trade strong trends on a longer term timeframe so momentum from fundamental factors are most likely driving these movements as opposed to random market behaviour. We never predict the future and simply jump on board the current daily trend. until of course it bends.

If this approach sounds interesting to you then I welcome you to this thread. As with standard warnings on other threads, this is for interested members only, who wish to learn or positively contribute.

I am not going to post backtest results (ok I lied. refer to Post 13) as it is a pointless exercise given no live trading has occurred. This will be a task for those who wish to trade this strategy themselves. Despite this however, from my own testing results, I could not be happier and I think those who get involved will also come to this conclusion.

What I can tell you however is this. Over the last 688 calendar days, there have been only 450 trade opportunities across the portfolio which gives you an idea that the strategy is fairly selective in its entries namely due to the condition that a good quality daily trend needs to be in place before a trade entry is signalled. For those who lack the patience to wait for these opportunities, this strategy may not be for you.

If you are happy with all this then I will shortly start posting a few charts to get things cracking.

Note to Readers
During the course of this thread the approach has been dynamically adjusting to respond to market conditions and strategy additions have been made to supercharge performance results. This approach described above which I refer to as the Diversified Trend Trading Approach DTT represents the core module to this technique and it is a necessary pre-requisite to fully understand this approach prior to moving onto supercharging trend trading additions which can be found later in the thread.

  1. Posts 1 to 230 relate to the basic DDT approach;
  2. Posts 231 onwards relate to a supercharged variant called the Enhanced Diversified Trend Trading approach of EDTT. Comprehensive details regarding the EDTT are found on post 231.
  3. Pay particular attention to post 360 onwards relating to a methodological recap of the EDTTI. RedLineFred has kindly compiled this recap into a pdf for easy reference.

Unfortunately to understand this approach in its entirety, you need to do a bit of reading for Posts 1 to 230 are still compuslory for understanding and get’s you a beginers certificate before you can advance to supercharged variants. This thread is not a free ride for a trader and demands a bit of effort on the readers part if they wish to participate or trade this approach. There are many nuances that must be understood before committing your hard earned dollars to this technique. I wish you all well, but please do your homework first.

101 Inspirational Trading Quotes And What They Mean

Inspirational trading quotes have more uses than you’d imagine. They’re not just cool saying you can spring out during a conversation to look smart.

Here are some awesome reasons to look over inspirational trading quotes :

  • They keep usmotivatedin difficult times . We all need that extra boost sometimes to remind ourselves that bad times will eventually pass.
  • Can be the backbone of our trading strategy . The best trading strategies tend to be the simplest and sometimes a simple idea can be the best.
  • Can be the reason why we trade . Some quotes can speak volumes about the market – what works and what doesn’t.
  • They can act as important reminders and stop us from making mistakes . No sayings are more memorable than those that warn us not to make the same mistakes again.

Looking for more than just trading quotes? Want to start making money trading? Get a free forex trading education here!

Here are our top 101 Inspirational trading quotes:

1. “The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder

Meaning : A quote to remind you to focus on getting the trade to work first! Money is the reward, an outcome of a successful trade. Thinking solely about the reward will cloud your judgement.

2. “Do more of what works and less of what doesn’t.” – Steve Clark

Meaning : A great quote to remind yourself to keep track of what is working in your trading strategy and what isn’t. If something isn’t working for you, cut it. Remember to keep a trading journal!

3. “Never, ever argue with your trading system” – Michael Covel

Meaning : It will never get you anywhere! And let’s face it, it’s probably not the systems’ fault. If it’s really doing you no good, change it!

4. “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

Meaning : The best traders are never right all the time, they make losses too. Focus on getting more trades right than wrong and you’ll be considered successful.

5. “All the math you need in the stock market you get in the fourth grade.” – Peter Lynch

Meaning : A trading quote to remind you to keep your trading strategy simple . The more complex your trading strategy is, the more things can go wrong.

6. “Novice Traders trade 5 to 10 times too big. They are taking 5 to 10 percent risk, on a trade they should be taking 1 to 2 percent risk on.” – Bruce Kovner

Meaning : As a rule, when you first start trading, never risk more than one or two percent of your trading account on a trade. For example, if you have $3,000 in your account, never trade more than $30.

7. “In investing, what is comfortable is rarely profitable.” – Robert Arnott

Meaning : You need to take risks in order to make a profit. If there’s no risk in the trades your making, you cannot expect to really make a living as a trader.

8. “There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer.” – Jack Schwagger

Meaning : An inspirational trading quote to remind you to stop looking for shortcuts ! In reality, no one really knows how to crack the market and be successful all the time.

9. “If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.” – Bill Lipschutz

Meaning : The best traders know that patience is the key to making successful trades . Don’t trade too often and avoid overtrading.

10. “In trading/investing, it’s not about how much you make but rather how much you don’t lose.” – Bernard Baruch

Meaning : Before you make a trade, you need to understand your risk-reward ratio. Proper risk management is more important than making money.

11. “Every trader has strengths and weakness. Some are good holders of winners but may hold their losers a little too long. Others may cut their winners a little short but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.” – Michael Marcus

Meaning : What works for you as a trader may not work for others. Every trader has their own trading style .

12. “Time is your friend; impulse is your enemy.” – John Bogle

Meaning : Another motivational trading quote to remind you to be patient. Take your time and don’t give in to your impulses.

13. “There is a time to go long, a time to go short and a time to go fishing.” – Jesse Livermore

Meaning : Another inspirational trading quote about trading less rather than more. Having a break from trading can often make you a better trader.

14. “Do not anticipate and move without market confirmation – being a little late in your trade is your insurance that you are right or wrong.” – Jesse Livermore

Meaning : A great tip for traders who use analysis . You need to wait and confirm that a trend is emerging before making a trade. That way you can be sure your trading strategy will work.

15. “The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.” – Jesse Livermore

Meaning : The perfect trading quote for someone who forgets that trading is not like a regular nine to five job. You won’t make money every day and, if you’re successful, you won’t need to.

16. “Money is made by sitting, not trading.” – Jesse Livermore

Meaning : Sit and wait for the right opportunity. Awesome trading quote about patience.

17. “I learned early that 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. I’ve never forgotten that.” – Jesse Livermore

Meaning : It’s a well-known fact that markets repeat themselves ! If a situation appeared before, it will certainly reappear.

18. “Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.” – Mark Douglas

Meaning : It doesn’t matter how good your market analysis is, it can still be wrong. You need to remember that it is not an exact science.

19. “If you can learn to create a state of mind that is not affected by the market’s behaviour, the struggle will cease to exist.” – Mark Douglas

Meaning : The perfect trading quote for highlighting the importance of being a detached trader. Don’t give in to the pressure the market puts on you.

20. “Dangers of watching every tick are twofold: overtrading and increased chances of prematurely liquidating good positions.” – Jack Schwagger

Meaning : Stop watching the market so closely. You’ll only end up trading too much, which is risky and/or close good positions too early. Either way, you’ll lose money.

21. “We want to perceive ourselves as winners, but successful traders are always focusing on their losses.” – Peter Borish

Meaning : Successful traders think more about protecting what they already have. That is always more important than making more money.

22. “Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.” – Larry Hite

Meaning : A superb trading quote about understanding risk. If you don’t respect risk, you will fail as a trader.

23. “Frankly, I don’t see markets; I see risks, rewards, and money.” – Larry Hite

Meaning : Another one for keeping things simple! Remove everything else from your mind and focus on the key elements of trading.

24. “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think any one book will do it for you.” – Charlie Munger

Meaning : Good traders never stop learning. Even when they become pros at trading, they are still learning.

25. “In the short run, the market is a voting machine, but in the long run it is a weighing machine.” – Benjamin Graham

Meaning : The market acts like a popularity contest in the short-term, but in the long-term, we see the real value behind a market instrument.

26. “It’s not what we do once in a while that shapes our lives. It’s what we do consistently.” – Tony Robbins

Meaning : Smart words for trading and for life! In order to be considered a successful trader, you need to focus on making consistent trades over time.

27. “Bulls make money, bears make money, pigs get slaughtered.” – Unknown

Meaning : You can make money when the market is going up and down, but you won’t make money if you’re greedy.

28. “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

Meaning : Trading is not the same as gambling. It’s not about having fun, it’s about working out the right time to make your move.

29. “The fundamental law of investing is the uncertainty of the future.” – Peter Bernstein

Meaning : You can never be sure of what will happen. It doesn’t matter how good your research is, you will never be completely right.

30. “You can be free. You can live and work anywhere in the world. You can be independent from routine and not answer to anybody.” – Alexander Elder

Meaning : Perhaps one of the most inspirational trading quotes to remind you how liberating it is to be a trader!

31. “You have to identify your weaknesses and work to change. Keep a trading diary – write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.” – Alexander Elder

Meaning : This motivational trading quote is may be one of the most actionable. Take heed and find out what works for you.

32. “Sheer will and determination is no substitute for something that actually works.” – Jason Klatt

Meaning : Motivation is not enough to become a successful trader. You need knowledge, specifically knowledge of what works for you.

33. “Short-term volatility is greatest at turning points and diminishes as a trend becomes established.” – George Soros

Meaning : Great words from a trading legend. Remember this quote when putting together a trading strategy that utilises trends.

34. “Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected.” – George Soros

Meaning : Although we can never be 100% sure what direction the markets will move, some things can be estimated and some things can’t.

35. “It’s not whether you’re right or wrong that’s important, it’s how much money you make when you’re right and how much you lose when you’re wrong.” – George Soros

Meaning : Another excellent quote for risk-reward ratios. And another example of a top trader keeping losses in mind at all times.

36. “In trading, the impossible happens about twice a year.” – Henri M Simoes

Meaning : A helpful reminder that every so often the unbelievable will happen. Keep your eyes peeled for those moments.

37. “The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behaviour.” – Brett Steenbarger

Meaning : You can’t fit the market around your strategy, you can only fit your strategy around the market.

38. “Never invest in any idea you can’t illustrate with a crayon.” – Peter Lynch

Meaning : A hilarious motivational quote that reminds us to keep trading simple. If something is too complicated, it means there are more chances of it going wrong.

39. “I get real, real concerned when I see trading strategies with too many rules (you should too).” – Larry Connors

Meaning : Just like the above, this is a great trading quote about keeping trading strategies simple. The fewer the rules there are the better.

40. “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

Meaning : Patience is one of the most valued skills in trading. You have to remember to only strike when the time is right!

41. “I believe in analysis and not forecasting.” – Nicolas Darvas

Meaning : A good quote for keeping trading scientific and in the moment. Try to keep forecasting to a minimum, if possible.

42. “Trading doesn’t just reveal your character, it also builds it if you stay in the game long enough.” – Yvan Byeajee

Meaning : Attaining the skills to become a great trader is a lifelong journey. To be successful requires you to make changes in your life.

43. “Focus, patience, wise discernment, non-attachment – the skills you acquire in meditation and the skills you need to thrive in trading are one and the same.” – Yvan Byeajee

Meaning : Four essential skills any successful trader needs. They won’t just help you trade better, they can also help you lead a better life.

44. “Confidence is not ‘I will profit on this trade.’ Confidence is ‘I will be fine if I don’t profit from this trade.” – Yvan Byeajee

Meaning : Excellent advise on trader psychology. You need to have the right approach to winning and losing trades.

45. “You will never find fulfilment trading the markets if you don’t learn to appreciate and be satisfied with what you already have.” – Yvan Byeajee

Meaning : A great trading quote to remind you to appreciate and protect what you already have. Understanding risk means appreciating what you already have.

46. “Beware of trading quotes.” – Andreas Clenow

Meaning : A hilarious quote to remind you that inspirational trading quotes are not enough to be a successful trader!

47. “Learn to take losses. The most important thing in making money is not letting your losses get out of hand.” – Martin Schwartz

Meaning : In order to avoid losses, you must first understand and respect them. But more importantly, you need to mentally accept them .

48. “A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate with working smarter. In fact, sometimes is the other way around.” – Martin Schwartz

Meaning : Smart traders trade less not more ! Don’t let yourself get caught up in the market!

49. “When I became a winner, I said, ‘I figured it out, but if I’m wrong, I’m getting the hell out, because I want to save my money and go on to the next trade.” – Martin Schwartz

Meaning : Another important reminder to look after what you already have.

50. “I have learned through the years that after a good run of profits in the markets, it’s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.” – Martin Schwartz

Meaning : Similar to the above, this inspirational trading quote is a reminder that you need to take a break from the markets every so often to avoid overtrading and losing what you have. Reward yourself!

51. “I always laugh at people who say, ‘I’ve never met a rich technician.’ I love that! It’s such an arrogant, nonsensical response. I used fundamentals for nine years and got rich as a technician.” – Martin Schwartz

Meaning : A good quote to remind yourself of the importance of technical analysis .

52. “When I get hurt in the market, I get the hell out. It doesn’t matter at all where the market is trading. I just get out, because I believe that once you’re hurt in the market, your decisions are going to be far less objective than they are when you’re doing well… If you stick around when the market is severely against you, sooner or later they are going to carry you out.” – Randy McKay

Meaning : Trading on emotions is one of the riskiest things you can do. If you think you’re acting on emotion rather than the state of the market, you need a break.

53. “I’ll keep reducing my trading size as long as I’m losing… My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds.” – Randy McKay

Meaning : A great trading strategy to reduce losses. Every time you lose a trade, reduce the amount you are trading.

54. “The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phillip Fisher

Meaning : In trading, the price of an instrument isn’t as important as the value it gives you.

55. “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen

Meaning : A great point illustrating that a saving account will never make you rich. Trading is a much more effective way to create wealth.

56. “Losses are necessary, as long as they are associated with a technique to help you learn from them” – David Sikhosana

Meaning : Essentially losses are only a bad thing when you fail to learn from them. By learning from your losses, you are less likely to repeat them.

57. “Everyday I assume every position I have is wrong.” – Paul Tudor Jones

Meaning : It may not sound that inspirational , but this quote speaks volumes about the importance of mentally preparing for being wrong.

58. “The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” – Paul Tudor Jones

Meaning : As that old saying goes ‘knowledge is power’. With trading that undeniably true.

59. “Trading is very competitive and you have to be able to handle getting your butt kicked.” – Paul Tudor Jones

Meaning : Don’t give up just because your trading plan fell apart. You need to learn from that experience and keep going!

60. “That cotton trade was almost the deal breaker for me. It was at that point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?” – Paul Tudor Jones

Meaning : This trading quote highlights how important it is to diversify your portfolio . Never risk anything on just one trade.

61. “I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have” – Paul Tudor Jones

Meaning : Another fine quote from Paul Tudor Jones on the importance of protecting what you have.

62. “An investment in knowledge pays the best interest.” – Benjamin Franklin

Meaning : This inspirational trading quote has to be one of the smartest. The more you know about what you trading, the more likely you are to make an informed trade, one that gives better results.

63. “Do not be embarrassed by your failures, learn from them and start again.” – Richard Branson

Meaning : While Richard Branson might not be a trader, his words speak a lot of truth. Learn from your mistakes and keep going.

64. “He who knows when he can fight and when he cannot, will be victorious.” – Sun Tzu

Meaning : Another quote from outside the trading world. Essentially, by knowing when to trade and when not to trade, you will be successful.

65. “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.” – Ed Seykota

Meaning : Losing a trade is not the end of the world. If you learned something from it, you still got something out of it.

66. “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.” – Ed Seykota

Meaning : Not all of your trades will be successful. Therefore, you can only become a good trader by learning how to minimise your losses.

67. “The trend is your friend until the end when it bends.” – Ed Seykota

Meaning : Wordplay on the famous phrase ‘the trend is your friend’. You need to remember that trends never last forever.

68. “Are you willing to lose money on a trade? If not, then don’t take it. You can only win if you’re not afraid to lose. And you can only do that if you truly accept the risks in front of you.” – Sami Abusaad

Meaning : A fine trading quote that once again illustrates the importance of understanding risks and how it relates to success.

69. “If you personalise losses, you can’t trade.” – Bruce Kovner

Meaning : Emotion has no place in the trading arena. If you want to trade, you need to remove it.

70. “I know where I’m getting out before I get in.” – Bruce Kovner

Meaning : A clever quote for entry and exit strategies . Before you start your strategy, you need to know where you’ll enter and exit.

71. “I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.” – Tom Basso

Meaning : Sure, when you break it down trading is all about buying and selling, but without the right mindset and risk management skills, many things can go wrong.

72. “Stocks are bought not in fear but in hope. They are typically sold out of fear.” – Justin Mamis

Meaning : An excellent quote about trader psychology . Many of the actions undertaken by novice traders and motivated by emotions.

73. “What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.” – William O’Neil

Meaning : The market will often beat your expectations, but that doesn’t mean you should count on that happening!

74. “Letting losses run is the most serious mistake made by most investors.” – William O’Neil

Meaning : Once again, another inspirational trading quote highlighting how important reducing losses is to be profitable.

75. “The market is a device for transferring money from the impatient to the patient.” – Warren Buffet

Meaning : The impatient will always lose out to the patient. Patience is one of the most valued skills you can have as a trader.

76. “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

Meaning : Intelligence is not always the most important thing about trading. There are a wealth of other factors at play.

77. “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” – Warren Buffet

Meaning : Another fine quote from Warren Buffet about emotions and making money trading .

78. “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffet

Meaning : All it takes is one little mistake to lose everything. That’s why you need to be cautious when trading and understand the risks.

79. “Look at market fluctuations as your friend rather than your enemy.” – Warren Buffet

Meaning : Market fluctuations present you with opportunities to enter and exit the market, don’t be afraid of them.

80. “Profit from folly, rather than participate in it.” – Warren Buffet

Meaning : Make sure the only mistakes you see are the mistakes of others, not your own. When others are making a mistake, it’s a chance for you to profit.

81. “Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

Meaning : An important reminder that market volatility can swallow your whole trading account if you’re not careful.

82. “Accepting losses is the most important single investment device to ensure the safety of capital.” – Gerald M. Loeb

Meaning : If you fail to accept your losses and start chasing them instead, you’re putting all of your capital a risk!

83. “The hard part is discipline, patience and judgement.” – Seth Klarman

Meaning : Trading is in a sense easy, but acquiring the skills to trade well can be difficult.

84. “In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.” – Seth Klarman

Meaning : Your analysis will never be completely correct and it is important to recognise that.

85. “I always define my risk, and I don’t have to worry about it.” – Tony Saliba

Meaning : The first step every trader should undertake before making a trade is to define their risk!

86. “Hope is [a] bogus emotion that only costs you money.” – Jim Cramer

Meaning : Never base your trades on hope. Instead, they should be well-informed based on the information and analysis you have at hand.

87. “The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” – Victor Sperandeo

Meaning : Another fine trading quote about cutting losses. If you don’t, you’ll never be consistently successful.

88. “All you need is one pattern to make a living.” – Linda Raschke

Meaning : The simplest patterns often reap the best rewards. If you can learn to use them you can make a living from trading.

89. “Sometimes the best trade is no trade.” – Unknown

Meaning : A well-known trading quote . You don’t need to trade all the time to be successful.

90. “Patterns don’t work 100% of the time. But they are still critical because they help you define your risk. If you ignore patterns and focus on hunches, feelings, and hot tips, just forget about achieving consistency.” – Ifan Wei

Meaning : If you want to be a consistently successful trader, you need to work with patterns!

91. “It’s ok to be wrong; it’s unforgivable to stay wrong.” – Martin Zweig

Meaning : A clever quote to remind you to learn from your mistakes.

92. “The four most dangerous words in investing are: This time it’s different.” – Sir John Templeton

Meaning : It’s only ever different if you learned from your mistakes last time!

93. “There is a huge difference between a good trade and good trading.” – Steve Burns

Meaning : Anyone can make a good trade, but not everyone can be a consistently good trader.

94. “Buy things that are going up. Sell things that are going down. And when they stop, get out!” – Rob Smith

Meaning : Buying when low and selling when high is not enough. You also need to know the direction the instrument will move in.

95. “Don’t blindly follow someone, follow [the] market and try to hear what it is telling you.” – Jaymin Shah

Meaning : Never follow people’s advice without doing your own research. Your own research is always more valuable.

96. “You never know what kind of setup [the] market will present to you, your objective should be to find [an] opportunity where risk-reward ratio is best.” – Jaymin Shah

Meaning : The market is never the same, it always changes. Every time you trade you need to reevaluate the situation looking for a favourable risk-reward ratio.

97. “What’s the difference between a pro and an amateur? Professionals look for what’s wrong with a setup. Amateurs only look for what’s right.” – Mark Harila

Meaning : When you get to the point of being a professional trader, you look more for errors than anything else. Amateurs often fail to do that.

98. “A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business.” – Van K. Tharp

Meaning : A great trading quote that sums up what a great trader needs. Most importantly highlighting learning from mistakes and having a plan.

99. “As much as possible you don’t want to be well paid merely for taking big risks. Anyone can manage that. You want to be well-paid because you did your homework.” – Joel Greenblatt

Meaning : Being risky doesn’t pay off. What really pays off is researching what you’re trading and setting yourself goals.

100. “Traders need a daily routine that they love. If you don’t love it, you’re not gonna do it.” – Scott Redler

Meaning : A truly inspiring trading quote to remind you that you need a trading style that fits in

101. “Trade the market in front of you, not the one you want!” – Scott Redler

Meaning : Your trading strategy should reflect the reality of the market. You can’t just apply any strategy you like.

Key points

If you remember anything from this article, make it these points.

  • Trading quotescan remind us to keep things simple! Surround yourself with reminders when things get too complicated.
  • Many of the besttrading quotesremind us that research comes first . Being informed on what you are about to trade will always pay off.
  • Patience is a key part of trading . Trading less often is usually better than trading frequently.
  • Trading is not like a regular day job . You can’t fit the market around your life.

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