Top Quotes About Trading From 15+ Classic Books:
Over the years, I’ve read quite a few books that have helped me progress as a trader (I typically try to read at least 1 per month).
Shockingly, many of the books that have had the biggest impact on me and my individual development as a trader don’t have anything specifically to do with trading/investing/finance at all. Of course some of them do, but the bulk of them do not.
This is because you can’t just “intellectualize” trading success. Passively learning about trading through books or videos doesn’t cut it. This can be a great first step, but this knowledge then needs to be turned into legitimate habits & skills through application.
Far too many new traders treat markets as an opportunity to impulsively gamble and satiate their short-term emotional desires. But good (consistent & sustainable) trading is a skill-based, peak performance activity. Luck is fleeting; real habits & skills are long-lasting.
So most of these books (trading-related or not) tend to cover important topics like fixed vs. growth mindset, deliberate practice, habit-building, skill-acquisition, flow state, perseverance, goal-setting, behavioral psychology, and more.
1 Handpicked Quote From 18 of My Favorite Books Related to Trading:
Since I’ve published 18 “Top Quotes From [Insert Book Title]” articles on this site to date, I think it would be a fun exercise for me to pick just 1 quote from each and consolidate them here. But don’t worry: I’ll link to the full list of quotes for each book as well.
It won’t be easy to choose one single favorite quote from each book, but I’ll try my best. I’ll start off with books directly related to trading and/or investing, and then transition into the others indirectly related to trading (but still very much applicable).
1. The Playbook By Mike Bellafiore
Look, there’s no question that you can learn from observing others. But when it comes time to trade on your own, you cannot rely on the style or techniques of other traders. Learn from how they think, prepare, review, and work at their craft, but do not copy their trading. You have to find your own way as a trader, but – and this is the key point – a way that is supported by developing tried-and-true techniques that you take and then make your own.
2. One Good Trade By Mike Bellafiore
You have a choice. You can spend the first six months of your trading career not learning anything because you don’t listen, or you can start the right way. After six months, you can possess the skills that you need to trade profitably in any market, from anywhere, and for the rest of your trading career. Or you can be frustrated, unskilled, and with a decidedly negative trading account. Do not be one of the thousands who needlessly loses excessive amounts of money when he begins and worse still, never develops career-making trading skills.
3. The Disciplined Trader By Mark Douglas
You can’t grow or expand if you are denying the existence of environmental information that would clearly indicate your level of development. Nor can you acquire effective skills when you try to build from a base of illusion about the nature of the environment and yourself. If you won’t acknowledge your true starting point, you cannot take the next most appropriate step in the development of any skill you intend to learn.
4. Trading in the Zone By Mark Douglas
Many people make the mistake of assuming that once they understand something, the insight inherent in their new understanding automatically becomes a functional part of their identity. Most of the time understanding a concept is only a first step in the process of integrating that concept at a functional level. This is especially true of concepts that deal with thinking in probabilities. Our minds are not naturally wired to be ‘objective’ or to stay in the ‘now moment’. This means we have to actively train our minds to think from these perspectives.
5. The Psychology of Trading By Brett Steenbarger
Attend to yourself before attending to the markets. If you are not in your trading zone, you don’t want to be putting your hard-earned capital at risk. Frustration after one or more losses or missed opportunities; eagerness after scoring a win; boredom and a desire for excitement; fear and procrastination at times of opportunity – these are some of the most common ways in which emotional shifts alter your perception and response to events and color your trading.
6. Fooled By Randomness By Nassim Taleb
Markets (and life) are not simple win/lose types of situations, as the cost of the losses can be markedly different from that of the wins. Maximizing the probability of winning does not lead to maximizing the expectation of the game when one’s strategy may include skewness, i.e., a small chance of large loss and a large chance of a small win. If you engaged in a Russian roulette-type strategy with a low probability of a large loss, one that bankrupts you every several years, you are likely to show up as the winner in almost all samples – except in the year when you are dead.
7. The Hour Between Dog & Wolf By John Coates
On a winning streak we can become euphoric, and our appetite for risk expands so much that we turn manic, foolhardy and puffed up with self-importance. On a losing streak we struggle with fear, reliving the bad moments over and over, so that stress hormones linger in our brains, promoting a pathological risk aversion, even depression, and circulate in our blood, contributing to recurrent viral infections, high blood pressure, abdominal fat build-up and gastric ulcers. Financial risk taking is as much a biological activity, with as many medical consequences, as facing down a grizzly bear.
8. Principles By Ray Dalio
Remember this: The pain is all in your head. If you want to evolve, you need to go where the problems and the pain are. By confronting the pain, you will see more clearly the paradoxes and problems you face. Reflecting on them and resolving them will give you wisdom. The harder the pain and the challenge, the better.
9. Unshakeable By Tony Robbins
An undirected mind operates naturally in survival mode, constantly identifying and magnifying these potential threats to our well-being. The result: a life filled with stress and anxiety. Most people live this way, since it’s the path of least resistance. They make unconscious decisions, based on habit and conditioning, and are at the mercy of their own minds. They assume that it’s just an inevitable part of life to be frustrated, stressed, sad, and angry – in other words, to live in a suffering state.
10. Atomic Habits By James Clear
Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.
11. Grit By Angela Duckworth
As soon as possible, experts hungrily seek feedback on how they did. Necessarily, much of the feedback is negative. This means that experts are more interested in what they did wrong–so they can fix it–than what they did right. The active processing of this feedback is as essential as its immediacy…Then experts do it all over again, and again, and again. Until they have finally mastered what they set out to do. Until what was a struggle before is now fluent and flawless. Until conscious incompetence becomes unconscious competence.
12. Peak By Anders Ericsson and Robert Pool
Expert performers develop their extraordinary abilities through years and years of dedicated practice, improving step by step in a long, laborious process. There are no shortcuts. Various sorts of practice can be effective, but the most effective of all is deliberate practice. Deliberate practice takes advantage of the natural adaptability of the human brain and body to create new abilities. Most of these new abilities are created with the help of detailed mental representations, which allow us to analyze and respond to situations much more effectively than we could otherwise.
13. Flow By Mihaly Csikszentmihalyi
The flow experience that results from the use of skills leads to growth; passive entertainment leads nowhere. Collectively we are wasting each year the equivalent of millions of years of human consciousness. The energy that could be used to focus on complex goals, to provide for enjoyable growth, is squandered on patterns of stimulation that only mimic reality. Mass leisure, mass culture, and even high culture when only attended to passively and for extrinsic reasons – such as the wish to flaunt one’s status – are parasites of the mind. They absorb psychic energy without providing substantive strength in return.
14. Chop Wood Carry Water By Joshua Medcalf
In a world where anyone can look up information online, it’s deceptively easy to gain ‘knowledge.’ You can get pretty confident by reading everything you can get your hands on about a certain subject, it’s called ‘artificial maturity.’ But knowing about how to do something and having practical experience actually doing something are radically different.
15. The Subtle Art of Not Giving a F*ck By Mark Manson
Growth is an endlessly iterative process. When we learn something new, we don’t go from ‘wrong’ to ‘right.’ Rather, we go from wrong to slightly less wrong. And when we learn something additional, we go from slightly less wrong to slightly less wrong than that, and then to even less wrong than that, and so on. We are always in the process of approaching truth and perfection without actually ever reaching truth or perfection.
16. The Art of War By Sun Tzu
Now the general who wins a battle makes many calculations in his temple ere the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.
17. Limitless By Jim Kwik
Plasticity means that your learning, and indeed your life, is not fixed. You can be, do, have, and share anything when you optimize and rewire your brain. There are no limitations when you align and apply the right mindset, motivation, and methods.
18. Mindset By Carol Dweck
Just because some people can do something with little or no training, it doesn’t mean that others can’t do it (and sometimes do it even better) with training. This is so important, because many, many people with the fixed mindset think that someone’s early performance tells you all you need to know about their talent and their future.
Written by Matt Thomas (@MattThomasTP)
- Training For Day Trading – What is Training For Trading?
- Become a Consistently Profitable Trader – The Success Formula
- Top 3 Reasons Why Traders Fail at Such a High Rate (~90%)
- Failure is Only Feedback – Use Losses and Mistakes to Grow
- The Market is a Mirror – Your Experience is a Reflection of You