19 Quotes by Jack D. Schwager

Big market price changes happen when lots of people are forced to reevaluate their prejudices, not necessarily when the world actually changes. — Colm O'Shea

Being wrong is acceptable, but staying wrong is totally unacceptable.

If you don’t stay with your winners, you are not going to be able to pay for the losers.

I discovered that you can’t train people how to trade by just imparting knowledge. The key to trading success is emotional discipline. Making money has nothing to do with intelligence. Think of all the bright people that choose careers on Wall Street. If intelligence were the key, there would be a lot more people making money trading.

If instead of saying, “I’m going to do this trade,” you say, “I’m going to watch myself do this trade,” all of a sudden you find that the process is a lot easier.

My goal on Wall Street was never to get rich but to stay in business. There’s a big difference. If you’re out of the business, you can never get rich. That’s why you have to be especially cautious when you’re trading a larger position size.

One of my favorite patterns is the tendency for the markets to move from relative lows to relative highs and vice versa every two to four days. This pattern is a function of human behavior. It takes several days of a market rallying before it looks really good. That’s when everyone wants to buy it, and that’s the time when the professionals, like myself, are selling. Conversely, when the market has been down for a few days, and everyone is bearish, that’s the time I like to be buying.

Michael Jordan didn’t become a great basketball player because he wanted to do product endorsements. Van Gogh didn’t become a great painter because he dreamed that one day his paintings would sell for $50 million.

Another way to determine the direction of the general market is to focus on how the leading stocks are performing. If the stocks that have been leading the bull market start breaking down, that is a major sign the market has topped. Another important factor to watch is the Federal Reserve discount rate. Usually, after the Fed raises the rate two or three times, the market runs into trouble.