As you may know, in a few months a national trading magazine is going to have publish my articles on a strategy based on trading cliches. So, I am compiling a list. PLEASE feel free to add:
The trend is your friend
Cut your losses
Let your winners run
6 comments:
How bout:
"Never catch a falling knife"
"Don't let winners turn into losers"
"Live to trade another day"
"A trend is a trend, until it is broken."
"Buy low, sell high" and for bears: "Sell high, buy low".
Regarding contrarian momentum, "Don't step in front of a moving train."
"The market is a zero sum game."
"Don't underestimate how high (or low) it can go." (This applies to equities as well as indicators.)
My favourite trading cliche -
When market hands you a gift, take it.
Thanks for the cliches so far. I plan to use some of these in the magazine article I am currently writing. In it, I develop a trading strategy based on cliches. Sounds crazy, but it actually seems to work (if you pick the right cliches!). I'll post more as the publication date gets close.
Thanks to Rob in New York for these...
"An overlay loser is a winner, and an underlay winner is a loser." Of course this refers to the fact that when the percentages fall into place (law of large numbers), if you are consistently on the right side of the risk-reward dynamic, the profit column will confirm that. Everyone gets an underlay winner, at times, but taking risks which outweigh potential reward is a long-term guaranteed loser. You could also say that "luck," long term, is on the side of the player/investor who has the percentage edge.
The most simple, yet profound observation I have heard in my lifetime, was the lament of a horse player after a day at the races, who opined:
"Everyone gets winners, it's the losers that kill you." Amen.
"If you trade the gaps,the gap is between your ears"
"Eat like a squirrel and shit like an elephant" (ie your losses should be cut short,and your profits should be left to run)
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