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.my mind than it did most of the more technical phasesUnfortunately, markets move down faster than they moveof the game of stock speculation."even if, in percentage terms, stocks tend to go up farther thanLefevre, Reminiscences of a Stock Operatorthey move down).In it doesn't make sense to take 2 percent profitswhen your commissions (in and out) are 2 percent.You mustMy friend Weintraub heard this once from a trader:have the patience to wait for those 50 percent (usually) up"The way to make money in this business is not to be smart, justmoves.In futures, you need the discipline to get out whenavoid being stupid (by betting everything you have on a fewyou've doubled your initial stake and not yield to greed.Youcan't pyramid a winning position by violating the Psychological"It never was my thinking that made the big money Law of 10/20 is very easy to do when the marketmoves in your direction.Or, as Longstreet put it:for me.It was always my It's no trick to beright on the market.You always find a lot of early bulls"A good general never risks all of his troops in thebull markets and early bears in bear Menfront line at one time."who can both be right and sit tight are uncommon."Longstreet, Viezvpoints of a Commodity TraderLefevre, Reminiscences of a Stock Operator4849 Chapter Four Sayings from the Floor"The average man doesn't wish to be told that this is He has to reverse what you might call his naturala bull or bear market.What he desires is to be told He must fear that his loss may developspecifically which particular stock to buy or sell.He into a much bigger loss and hope that his profit maywants to get something for nothing.He doesn't want become a big profit."to work.He doesn't even wish to have to think.It isLefevre, Reminiscences of a Stock Operatortoo much bother to count the money that he picks upfrom the ground."Another old floor trader saying, as quoted in Market Wiz-Lefevre, Reminiscences of a Stock Operatorards, reads, "Put stops where they can't be reached Theidea is to make sure your analysis (at least temporarily) was bad"People want to learn how to trade.They wantif you are stopped out.That way you won't pull your stops orto be told what to do."immediately reenter the market on the same side without step-floor saying ping back and analyzing the situation afresh.Market Wizards also contains another common saying: "Wedon't trade markets, we trade money.""A loss never bothered me after I take it.I forget itovernight.But being not taking the"That is one trouble about trading on a large scale.Youthat is what does the damage to the pocketbook andcannot sneak out as you can when you pike along.Youto the soul."cannot always sell out when you wish or when youthink it wise.You have to get out when you can, whenReminiscences of a Stock Operatoryou have a market that will absorb your entire line.Failure to grasp the opportunity to get out may cost"The greatest loss is self-confidence."you millions.You cannot hesitate.If you do you areLongstreet, Viewpoints of a Commodity Traderlost."Lefevre, Reminiscences of a Stock Operator"The speculator's chief enemies are always boringfrom within.It is inseparable from human nature to"The big players always tip their hand."hope and to fear.In speculation when the market goesagainst you, you hope that every day will be the lastMarcus, as quoted in Market Wizardsyou lose more than you should had you notlistened to the same ally that is a potentmarket can and often does cease to be a bull marketsuccess-bringer to empire builders and biglong before prices generally are ready to break.Myand little.And when the market goes your way youlong expected warning came to me when I noticedbecome fearful that the next day will take away yourthat, one after another, those stocks which had beenprofit, and you get soon.Fear keeps you fromthe leaders of the not come back."making as much money as you ought to.The success-Lefevre, Reminiscences of a Stock Operatorful trader has to fight these two deep-seated instincts.50 51 Sayings from the FloorChapter Fourprice went down 1-1/2 cents on my sell-"Three drives to a top" is another common floor saying ISuch being the case, what was the only thing toheard long before I heard of R.N.Elliott.By the way, the threedo? Of course, to sell a lot more.Following the dictatesdrives to a top of a commodity bull are quite different than thoseof experience may fool you, now and then.But notof a stock bull (more on thisfollowing them invariably makes an ass of you.So Isold 2 million bushels and the price went down more."I like the short side of the market because there is lessA few days later the market's behavior practicallycompany."compelled me to sell an additional 2 million bushelsLongstreet, Viewpoints of a Commodity Traderand the price declined further still; a few days laterwheat started to break badly and slumped off sixConsider this facetious floor trader saying: "When you'reyou're wrong." This saying contains these kernels of truth:Lefevre, Reminiscences of a Stock Operatorbear markets go down faster than bull markets, and during thestart and middle of bull markets, selling points are usually easierTwo more common sayings are: "The best charts are theto identify than buying spots.ones you never see," and "You're never far from (take your pick):"Observation, experience, memory, and mathematics:a Line, an Elliott Wave Extension, a tech point, etc."these are what the successful trader must depend on.Ninety percent of traders are taught to look at two basicHe must not only observe accurately but remember atindicators: momentum measures (like stochastics, RSI, percentall times what he has He must always relyetc.) and chart formations.Since 90 percent are losing, maybeon is, try to anticipate them.Yearsit's time for you to find the charts you never see running inof practice at the game, of constant study, of alwaysInvestor's Business Daily and stop looking for some esoteric rea-enable the trader to act on the instantson why you lost ("I missed this Gann line," ad nauseum) inwhen the unexpected happens as well as when thethe charts you do see.expected comes to pass
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