And so on to the good news. Here are my personal gems from this book.
I just loved this summary of the topic:
[I]
“The market is an easy game to play. It is just that we are hell-bent upon making it so complicated. That’s what makes it so difficult for us to win. The problem lies not within the rules, but within ourselves as we apply these rules to our investments and trading decisions. Yes, the problem is internal…”[/I]
This is a very insightful statement. It reminds of one of my favourite themes that : " a good trader can succeed with a poor strategy but a poor trader will never succeed even with the best strategy." The on-going problems that traders usually suffer from are inside us and not on the charts. Certainly, price erratics cause us losses every now and again but whether we are consistent over time is more a matter of internal character traits and emotions.
And on the same theme:
[I]“Most traders fail because they lack a disciplined approach. Mostly, they fail because they fail to execute their plan.”
[/I]
Here are a few of the comments that I felt were gems of wisdom that live for ever:
On trends:
[I]“When a market is moving in one direction, it is more likely than not to continue to move in that direction. To get in its way is to swim against the river.”
“Usually when we swim against the current, we get very tired and don’t go too far. Sometimes we drown.”
“We are fighting the river. The river always wins. Paddle with the stream.”
“Staying in the present moment takes great concentration. Whatever the trend is, you must assume that it will continue. You will know when it reverses because the prices will change.”[/I]
On who is the master:
[I]
“The perfect master? It is always right and never lies; tells you what to do, when to do it, when it changes its mind; and speaks lucidly in a language you can quickly understand. Listen to the master, and you will never be sorry. You will be rewarded greatly. You have to pay a price, however. The perfect master is the market itself. The market speaks to us in one language, price. Numbers, if you will. Numbers that you can recognize and differentiate.”
“What I am saying is that the market makes all the decisions. Our only decision is to listen, feel, and respond to the market’s siren. Always and without exception. Remember, the market never lies. It is only we who lie to ourselves.”
“More than likely you have been listening to a different sound. That noise is your ego’s voice. Stop listening and turn to the only expert worth following - the market.”
“Don’t make it difficult and obscure this simple truth. Forget your voice, and listen to the clear message and direct call given off by the market. Just feel, follow, and put full faith in your ability to blend with the leader, not attempt to lead the market.”
“It is very difficult for the mind to just watch the market unfold. Remember, all we have to do is stay in the present moment. Don’t think about the past or the future. Focus on the here and now, and listen to the voice of the market.”
[/I]
On volatile markets:
[I]“A market jiggles back and forth, producing many momentary price changes in each direction. If the market moves in a narrow range, there can be a lot of switching before a major move occurs. We call this being chopped. Remember, it is far better to be chopped for a while than to be beaten completely. Eventually that will be the case if we continue to hold a loser too long.”
“A market can change direction quickly. It is emotionally and physically exhausting to keep up with each swing. The best we can do is stay in the present moment and see what the next moment brings.”
[/I]
On timeframes:
[I]“Each trader or investor must define what he thinks a moment is. For a floor trader, it can be the smallest change in direction. For an armchair investor, it can be looked at from closing price to closing price.” [/I]
On discipline and diligence:
[I]“I know of so very few arenas where so much concentration is required and so much is at stake. It really is like being engaged in hand-to-hand combat. Instead of your life, it is your money that’s on the line.”
“One of the wealthiest traders I know told me it took him twenty years to get it right, and he was a fast learner.”
“Reading the last price report is an easy function. Understanding what it means is not too difficult either. The herculean task is to respond to its message without hesitation. If it says time to get in, get in. When the last sale indicates time to get out, get out. You know when you have a winner, and you know when you have a loser. What you do about it is what makes the difference.”[/I]
On success:
[I]
“Some people are smart enough to know they don’t have it and stay away from the market. Others play the market and find out the hard way what’s required. If they have the fortitude and willingness to learn from their mistakes, they might make it. Luck can carry you only so far. Eventually the market weeds out those who rely on luck to survive.”[/I]
And on a lighter note, two lovely extra rewards:
A new word: “discombobulated”. I have never heard this before 
Definition: “Discombobulate is a fun, fancy word for “confuse.” If something has put you in a state where you don’t know up from down and you can’t spell your own name, you may be discombobulated.”
And from the references:
[I]“Keep up the good work. I am a short term trader and a 62 year old grandmother having the time of her life. Love the market, love my computer and love good advice. Just hate losing.”[/I]
Don’t you just love it!!!