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.
Interpretation
Good trading relies heavily on the ability to cut losses effectively.
This quote emphasizes the importance of risk management in trading, specifically focusing on the necessity of cutting losses to preserve capital. Ed Seykota suggests that by adhering to this foundational principle, traders can improve their chances of success in the market.
In practice
This quote could be shared in a trading seminar to emphasize the critical nature of managing losses.
If you want to know everything about the market, go to the beach. Push and pull your hands with the waves. Some are bigger waves, some are smaller. But if you try to push the wave out when it's coming in, it'll never happen. The market is always right.
Charting is a little like surfing. You dont 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 its happening and then have the drive to act at the right time.
You have to be able to bounce back and deal with disappointment, failure and weaknesses, and a lot of that happens behind the scenes for teams that are very successful.
I've had a lot of majors where I didn't play well until the last round. Keep yourself in contention; that's the name of the game. I usually ended up shooting a good round and all of a sudden, somehow, I won.
Of course, once you've been a Beatle, you're never really out of it. People always want to know what you're up to, and if you don't immediately tell 'em, that's when they start making stuff up.
A people... who are possessed of the spirit of commerce, who see and who will pursue their advantages may achieve almost anything.
The toughest thing about success is that you've got to keep on being a success. Talent is only a starting point in this business. You've got to keep on working that talent. Someday I'll reach for it and it won't be there.
If your aspirations are not greater than your resources, youβre not an entrepreneur.
Subscribe for the occasional hand-picked quote. No noise.