We all need a little trading inspiration now and then, and there’s no better way to get it than to think about what some of the best traders of all time have said.
I’ve learned a lot from the trading books and biographies of famous traders I’ve read over the years. Some of their quotes have stuck with me, and I say them to myself every day as I look at the charts.
Before each quote, you’ll see a short paragraph that tells you what I personally take away from it, what it means to me, and how I use it in my trading strategy.
Here are 13 of my all-time favorite trading quotes that I believe, if followed, will help transform your trading career:
1. Ed Seykota on trading with fundamentals (news trading):
Ed Seykota is one of the featured traders in Jack Schwager’s first Market Wizards books (excellent reading, btw). Whilst he has many profound quotes and insights in the interview within the book, the following quote always stood out to me because I feel the exact same way about fundamental analysis.
If you read my article on why I don’t trade the news, you can learn more about why I feel this way. But, the basic idea is that news/fundamentals are already reflected via the price action on the charts because the price action is literally the footprint of money. Markets tend to move based on expectations of future events; in this way, the actual news has already been processed and acted upon by the big traders before it is released to the public. So, it’s often futile to spend time researching economic reports and how they may or may not affect a particular market. In fact, doing so will often hurt your trading performance since the market may well do the opposite of what the news release implies. This is why I stick to pure price action trading: reading the charts and interpreting the footprint of money on them.
“Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”. I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in a very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.” – Ed Seykota
2. Richard Dennis on counter-trend trading:
Richard Dennis was one of the founders of the Turtle Trader’s experiment and has made hundreds of millions of dollars trading. How did he do this? largely by trend-following, which was what the Turtle Trader experiment was all about. His quote here is more insightful than it may seem due to its brevity. Trading against the trend is often tempting but rarely fruitful. Even for very experienced traders, fighting a strong trend is not something they do because they know it often ends in a loss. This is a core piece of my trading approach as well. As a rule of thumb, I am always looking to trade with the trend before anything else.
“I’ve certainly done it – that is, made counter-trend initiations. However, as a rule of thumb, I don’t think you should do it.” – Richard Dennis
3. Stanley Druckenmiller on risk/reward:
Stanley Druckenmiller worked with George Soros when he famously “broke the Bank of England” by shorting the British pound in 1992, reportedly raking in more than $1 billion in profits from that one trade. Hence, what he’s saying in the quote below is directly applicable to that huge win and to how I trade as well. The most important thing is making sure your winners are, on average, much, much bigger than your losers. This is why I preach a risk-reward ratio of at least 1:2 or higher.
“I’ve learned many things from him [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” – Stanley Druckenmiller
4. Jim Rogers on patience and sniper trading:
If you have read any of my articles, you probably know that I am a huge proponent of taking a patient, low-frequency, sniper-like approach to trading. As the great commodities speculator Jim Rogers said below, you want to wait until there is essential “money lying in the corner,” and then all you have to do is go take it. What he means is, what are the obvious trades that have convergence behind them? Also, be patient and don’t feel like you have to “make back” money if you just lost; this is how traders quickly spiral out of control!
“I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime. Even people who lose money in the market say, “I just lost my money, now I have to do something to make it back.” No, you don’t. You should sit there until you find something.” – Jim Rogers
5. Jesse Livermore on being out of the market:
As any great trader knows, being out of the market or “flat the market” IS a position and is usually the right one! Wait for the right trade setup at the right time or spot on the chart; don’t just always be in the market just because you can. Trading can either be a highly-skilled, discipline-fueled way to make money or it can be your own personal slot machine where you continuously hemorrhage your money. It’s up to you to decide which way you will play it.
“Play the market only when all factors are in your favor. No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well as economic reasons.” – Jesse Livermore
6. Warren Buffet on self-discipline and risk management:
I always think about the following quote from the great Warren Buffet (who needs no introduction, I hope). What he is saying is so succinct yet very powerful. One of the difficult things with trading is that you can follow a trading plan to the T for years and do very well through that discipline and self-control, but it only takes ONE trade where you’re over-leveraged and the market goes against you to wipe out a huge portion of all the money you’ve made. Not only are you wiping out that money quickly, but all the things you did to make it—all the discipline and good habits—can be erased in an instant. Hence, be sure you are always on your risk management game and always staying disciplined in the market.
“It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett
7. Paul Tudor Jones on protecting your capital:
Capital preservation is probably the most important part of trading and the most overlooked. It’s quite sad because if more traders understood how to preserve their capital or just how important it is, there would be more successful traders.
“I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have” – Paul Tudor Jones
8. George Soros on being a “contrarian” in the market:
I consider myself a “contrarian” trader. What that means is that I am always looking for the unexpected and looking at the market through the eyes of a professional, not an amateur. The amateur bets on the “obvious” looking breakout, whereas the professional knows that false breakouts are very common, and they may elect to wait for it to materialize rather than jumping in with the rest of the “herd.” George Soros is the epitome of a contrarian trader, as his Bank of England trade so famously proved. If you want to see the actual chart of the time he shorted, you can see it here. Notice there was actually a fake pattern the day before the market dropped and Soros made his $1 billion.
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” – George Soros
9. Marty Schwartz on learning to take losses properly:
Losing money in the market properly IS a skill. If you don’t learn to lose properly, you will definitely not end up profitable at year’s end. You are going to have losses; that is a fact. How you deal with them and how big you allow those losses to be are the variables that you control. So, control them, or else they will control you.
“Learn to take losses. The most important thing in making money is not letting your losses get out of hand.” – Marty Schwartz
10. Bruce Kovner on stop loss placement and position sizing:
The two most important components of risk management are stop-loss placement and position sizing. They are connected, as Bruce Kovner points out in the quote below. Your position size on a trade is determined by the stop loss because you must adjust your position size to maintain your desired dollar risk per trade so that you don’t exceed it, and the size of the position will vary depending on how wide your stop is. If your stop loss is wider you need to decrease the position size to maintain risk, if it’s narrower than you can increase position size. Generally speaking, however, and especially for newer traders, wider stop losses are better.
“Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis.” – Bruce Kovner
11. Paul Tudor Jones on not getting over-confident after winners:
Do you want to know the quickest way to lose money in the market and blow out your account? Get cocky, get arrogant, or get overconfident—whatever you want to call it—and when you start acting like this, you are all but sealing your fate as a losing trader. You do not control the market; you only control your reactions to it and your actions within it. Just because you hit a few winners in a row doesn’t mean you’re now a trading genius who will never lose. Remember: There is a random distribution of wins and losses for any given trading edge in the market, and if you don’t know what that means then please click the link above and read the article.
“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. My biggest hits have always come after I have had a great period and I started to think that I knew something.” – Paul Tudor Jones
12. Marty Schwartz on not over-trading:
Ah, overtrading, the death of most traders’ accounts. How can you avoid this, you ask? Simple: schedule breaks from trading, write them into your trading plan, and make them part of your trading routine. Don’t worry about missing out! FOMO is the most common mistake traders make. The market isn’t going anywhere, and that means you have a never-ending opportunity stream from which you can “go fishing” whenever you choose. This is part of the reasons trading is so awesome; you can make money and then take time off and then come back the market is still there with opportunities! The point is, you NEED breaks to reset and calibrate and to avoid getting over-confident and over-trading.
“I have learned through the years that after a good run of profits in the markets, it’s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.”– Marty Schwartz
13. Jesse Livermore on the repetitive nature of the market:
In the following quote, Jesse Livermore is talking about the semi-predictable nature of the markets and how the same things tend to happen again and again over time. This is because human beings’ responses and behaviors are very predictable and similar, generally speaking. Price action analysis allows us to spot repetitive patterns that clue us in on impending price movements in the market. These patterns have worked for centuries because human behavior is repetitive and predictable. Hence, when you learn to read the price action on the charts, you are learning to read the behavior of all the people participating in that market and what their collective behavior may lead to next.
“I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.” – Jesse Livermore
Conclusion:
We all need a little help sometimes, and we all need to learn from people who know more than us. Just reading about the traders mentioned in today’s lesson and many others has taught me a lot. You can also learn from them, and I think you should. The lessons I’ve learned from the best traders have had a big impact on how I trade and on the lessons and strategies I teach in my professional trading courses. Learn as much as you can from people who have come before you, and you will avoid making a lot of mistakes that can cost you a lot of money and throw off your trading. Let go of your ego and keep in mind that trading is a game of patience, discipline, and constant learning.
The Forex markets are open 24 hours a day, 7 days a week. The markets are always changing, and there are a million different factors that affect trading opportunities. It can be hard and stressful for people to do the trades on their own sometimes. In this situation, a lot of people choose to use a Forex Indicator. You need the right tools and to know how to use them in order to be successful at anything. As a Forex trader, the first thing you need to do is get indicators that help you make better trades. Great traders can’t be found without good indicators. The emotional factor is taken out of Forex Indicator. This means that feelings like greed or fear don’t get in the way of making smart, good choices.
A Forex Indicator also takes away the stress that comes with trading foreign currencies because it can look at all of the variables at once, which is something people can’t do. Forex Indicator makes decisions faster than people do, so you can jump on trading opportunities right away. With the help of forex expert advisors, you can trade more wisely and increase your chances of making money. But it’s also important to choose the right Forex Indicator, one that will keep you safe and make you money.
What Is Forex Indicator?
Before making trades on the markets platform, Forex traders look at different data to figure out how the market is doing and how it is likely to change in the future. With a thorough analysis of the market, traders should be able to use better trading strategies and make more money.
One way to look at market data is with forex indicators. Indicators try to predict how the market will act in the future by looking at past data, such as the price of a currency, how much of it is traded, and how well the market has done. Once traders have this information, they can make better trading decisions, which could lead to higher returns.
The Best Indicators for Forex
People are always looking for the best Forex indicators. While some indicators are more popular than others, there isn’t always one indicator that is better than the rest. Since there are many kinds of data, the best Forex indicators will depend on the kind of trading you want to do.
So, you shouldn’t act too quickly on information you got quickly. You might not get the advice you need from a quick look at an indicator or a summary of data, especially if your trading goals are different from the author’s or aren’t suited to the type of indicator you’ve looked at.
You can figure out which indicators are best for your trading career by figuring out what kind of trading you want to do and then figuring out how different indicators are.
How do indicators for Forex work?
There are so many technical indicators that it can be hard to choose just a few to use in a trading strategy. Some traders try out one indicator at a time, while others like to use a mix of indicators. Trend indicators, momentum indicators, and volatility indicators are the three main types of technical indicators that forex traders use.
Volume isn’t always seen as a reliable indicator on the decentralized forex market because there isn’t a lot of data about the volume of exchange trading. However, currency traders will sometimes use approximate volume numbers that they get by counting the tick movements of exchange rates.
Your strategy will be more complicated if you use more than one indicator. Even though there are exceptions, it’s usually best not to use two of the same type of indicator because they’ll just confirm each other’s signals. Instead, you should probably choose indicators that work well together.
Whether you decide to use one indicator or more, you will still have to choose which parameters to use. Some indicators have default settings that you should probably use at first. Some require you to choose a time frame for each bar, such as monthly, daily, weekly, or hourly. You might also have to choose a period, which is the number of bars that an indicator uses to figure out its value.
For instance, you can figure out daily moving average indicators for different time periods, such as the last 200, 100, or 50 days. Your strategy could be based on what happens when two or more moving averages cross over each other, or you could just use one moving average plotted over the exchange rate itself.
Indicators for Forex
Here are the different kinds of forex indicators that currency traders should know.
Type 1: Signs of a trend
“The trend is your friend” is a well-known saying among traders in the financial markets. Trend indicators can help you figure out which way trends are going and how strong they are so you can follow them. Here are some of the most common trend indicators.
The average direction change index
The Average Directional Movement Index (ADX) is a useful trend indicator that helps traders figure out how strong the underlying market trend is. It is made up of three parts: the ADX line, the Positive Directional Indicator (+DI), and the Negative Directional Indicator (-DI).
The ADX line is a smoothed moving average (SMMA) of the absolute values of the +DI and -DI components, and its value changes between 0 and 100. The standard period for the ADX is 14 bars, but you can try out different periods.
If the ADX value is between 0 and 25, there is little or no trend. If the ADX is between 25 and 50, the trend is strong. If the ADX is between 50 and 75, the trend is very strong. When the value is between 75 and 100, the trend is very strong.
Moving Averages
Moving averages can also help you figure out which way a trend is going. The easiest way to do this is to plot a simple moving average on a chart and then check if the exchange rate is above or below the moving average. If the exchange rate is higher than its moving average, that means that the pair of currencies is going up.
In the same way, you can compare two moving averages, like a 100-day MA and a 200-day MA. When the 100-day MA is higher than the 200-day MA, the indicators show that the price is going up. You can even trade based on when a moving average crosses over another.
SAR parabolique
It’s easy to use the Parabolic SAR indicator. Technical analysis software shows it as a series of dots above or below each candle or bar on a chart. When the dots are drawn above the exchange rate, it means that the market is getting worse. When the dots show up below the exchange rate, on the other hand, that means the market is strong.
The Parabolic SAR indicator is a great way to find changes in the market. If the dots move from above to below the exchange rate, that means a trend is starting to go up. If the dots move from below to above, that means a trend is starting to go down.
One way to use the Parabolic SAR could be to wait for a change to signal a change in direction. Then, make a trade in the direction shown once four dots in a row show that the move is real.
Type 2: Signs of movement
This group of forex indicators measures how quickly exchange rates change. Some people also call them rate of change indicators.
Index of relative strength
The Relative Strength Index, or RSI, can help you figure out if a currency pair has been overbought or oversold. The default calculation period is 14 candles or bars, and the value of the RSI moves between 0 and 100. If the RSI is 70 or higher, it means that the currency pair has been bought too much, while a reading below 30 means that it has been sold too much.
Moving Average Convergence Divergence Oscillator (MACD Oscillator)
Another way to measure momentum is with the Moving Average Convergence Divergence (MACD) oscillator. Sometimes it is shown with two lines (MACD and signal) and a histogram, and sometimes it is shown with just one signal line and a histogram.
“MACD(A,B,C)” is a common notation that means the MACD series is the difference of two exponential moving averages (EMAs) with periods A and B, and the average series is an EMA of the MACD series with period C. Most traders use the default setting of A=12, B=26, and C=9 periods, or MACD (12,26,9).
Using these standard values, the MACD line is found by taking the difference between the 26-day EMA and the 12-day EMA and adding it to 0. The MACD line’s 9-day exponential moving average (EMA) is the signal line, and the difference between the MACD line and the signal line is the MACD histogram.
Traders can look for the MACD line to cross over the signal line when the histogram changes direction. This could be seen as a buy signal if the MACD line crosses above the signal line or a sell signal if the MACD line crosses below the signal line.
The MACD line crossing its horizontal axis is another kind of MACD crossover. This means that the values of the fast and slow EMAs are the same. When the MACD line goes negative, it’s a sign that prices will go down, and when it goes up, it’s a sign that prices will go up.
Traders might also look for a difference between the exchange rate and the MACD to show a change in market momentum that could lead to a reversal. So, if the exchange rate makes a higher high but the MACD makes a lower high, that would be a sign that the trend is about to change in a bearish way. On the other hand, a bullish reversal signal would be if the exchange rate made a lower low but the MACD made a higher low.
Other Signs of Progress
Some traders also use the stochastic oscillator to show how the market is moving and to figure out when prices are too high or too low. Some traders who are more experienced might use the Ichimoku Kinko Hyo system, which is a complicated technical indicator with a graph that can help them figure out how the market is moving. It is made up of support and resistance levels, crossovers, oscillators, and trend indicators.
Type 3: Indicators of Volatility
Bollinger Bands
You can use Bollinger Bands to figure out how volatile a currency pair is. Before you can put them on a chart, you need to figure out their standard deviation and moving average. Then, you add two standard deviations to the moving average and subtract two standard deviations from the moving average to make lines above and below the moving average.
Some traders wait for the exchange rate to go above the upper band or below the lower band. This is a sign that they should sell or buy. This strategy works best in a market that goes up and down a lot but usually goes back to its average value.
Average True Range
Average True Range (ATR) is found by taking the exponential moving average (EMA) of the difference between the day’s high and low exchange rates, or between the day’s high and close, or between the day’s close and low exchange rates. The ATR is used to measure how volatile something is, and it can also be used to help manage risks.
Volume indicators
As was mentioned above, it is not as easy to see volume on the decentralized forex market as it is on markets that are mostly exchange-traded. By counting the number of ticks in the exchange rate, you can get an idea of the volume, which can be used to calculate some useful indicators.
Money Flow Chaikin
One example is Chaikin Money Flow (CMF), which is a volume-weighted average of accumulation and distribution over a certain amount of time, usually 21 days. It can move between 1 and -1, but most of the time it moves between 0.5 and -0.5. Values above zero show that there is pressure to buy, while values below zero show that there is pressure to sell.
Distribution Line of Accumulation
The Accumulation Distribution Line is also made with the help of volume data. When this indicator moves in the same direction as the exchange rate, it can help confirm a trend.
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FREQUENTLY ASKED QUESTIONS
The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. The foreign exchange market is the largest and most liquid financial market in the world. Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Daily turnover was reported to be over US $3.98 trillion in April 2010 by the Bank for International Settlements.
MetaTrader 4 indicators are powerful technical analysis tools which can help you to identify market trends and provide evidence for your predictions about future price movements.
Yes it is easy to use. MT4 indicators are a mathematical calculation of the price, time or volume, that will give you either a leading or lagging trade signal. No need to be professional. Everyone can do it. It is completely hands free and the whole process is 100% automated.
Yes it is too easy. Just a few steps and you will be ready to use Forex Indicator. You will also get a guide when you purchase any Forex Indicator, it will help you to install EA. If you still need any help please contact with us.
Yes Forex Indicator can work 24 hours per day from the market opening on Monday to the market closing on Friday.
MT4 is a free trading platform. You can download it from the official web sites of your broker. Here is the list of most popular brokers.
First you need a computer with a minimal hardware configuration and a stable internet connection. Second you need to install Metatrader 4 trading platform. You don’t need to have any additional Forex knowledge.
You can use any broker that offers the Metatrader 4 trading platform. But for Best Result we suggest you to trade with most popular brokers.
You can use Forex Indicator with multiple accounts. There is no restrictions.
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We know that the money is the main question. We know well that many people don’t have much money to get started. Our Indicator is made to be able to trade with a minimum amount of money. The minimum amount depends to your brokerage company too. You can start trading with a small amount as $5.
Every Forex Indicator is unique. Please check the guide before trading. If you don’t understand which one is suitable please contact us.
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Yes you can use. Please Backtest before using it in a real trading. Or use Demo Trade for at least one month with your broker spread and proper balance. Never use in live trading with any pair without demo testing. It is always better to invest time before losing any money.
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