Read What The Famous Scruffy Trader Has To Say (2024)

FAQs

What is the famous quote for trading? ›

Patience is the key to trading success. Without it, you will quickly find yourself trading subpar setups and losing money left and right. Not only that, but there is an opportunity cost that comes with overtrading.

What is the 3 5 7 rule in trading? A risk management principle known as the “3-5-7” rule in trading advises diversifying one's financial holdings to reduce risk. The 3% rule states that you should never risk more than 3% of your whole trading capital on a single deal.

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

Studies show that the number one mistake that losing traders make is not getting the balance right between risk and reward. Many let a losing trade continue in the hope that the market will reverse and turn that loss into a profit.

“I have a dream.”

– Martin Luther King Jr.

The 90 rule in Forex is a commonly cited statistic that states that 90% of Forex traders lose 90% of their money in the first 90 days. This is a sobering statistic, but it is important to understand why it is true and how to avoid falling into the same trap.

Let profits run and cut losses short Stop losses should never be moved away from the market. Be disciplined with yourself, when your stop loss level is touched, get out. If a trade is proving profitable, don't be afraid to track the market.

The Rule. If, after trading outside the Value Area, we then trade back into the Value Area (VA) and the market closes inside the VA in one of the 30 minute brackets then there is an 80% chance that the market will trade back to the other side of the VA.

A common approach for new day traders is to start with a goal of $200 per day and work up to $800-$1000 over time. Small winners are better than home runs because it forces you to stay on your plan and use discipline. Sure, you'll hit a big winner every now and then, but consistency is the real key to day trading.

Who is the most profitable day trader? ›

There are a lot of successful traders but Jesse Livermore is often regarded as the most successful day trader.

How day trading impacts your taxes. A profitable trader must pay taxes on their earnings, further reducing any potential profit. Additionally, day trading doesn't qualify for favorable tax treatment compared with long-term buy-and-hold investing.

In summary, if you want to make a living from day trading, your odds are probably around 4% with adequate capital and investing multiple hours every day honing your method over six months or more (once you have a method to even work on).

Richard J. Dennis (born 1949) was known as the "Prince of the Pit." He made his mark in the trading world as a highly successful Chicago-based commodities trader. He reportedly acquired a $200 million fortune over ten years from his speculating, but what's notable is that he is rumored to have started with just $1,600.

While some traders have been successful in becoming millionaires through scalping trading, many others have lost money and blown up their trading accounts. It is important to note that trading carries significant risks, and traders should only trade with money they can afford to lose.

In whatever you do, strive for enjoyment, focus, contentment, humility, openness... Paradoxically (and as an unintended consequence) your trading performance will improve significantly. Confidence is not "I will profit on this trade." Confidence is "I will be fine if I don't profit from this trade.

“It's far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.” One way to misinterpret Warren Buffett's value investing is to assume that the only criteria for buying a stock is that it should be undervalued. This quote seeks to correct that misunderstanding.

You're going to run out of time first. -Naval Ravikant.

“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. Risk management is critical in trading. Traders should always aim for a risk-reward ratio that suits their trading strategy.