In The New Market Wizards: Conversations with America’s Top Traders, Monroe Trout mentioned the trading rules that he lives by.

Make sure you have the edge. Know what your edge is. Have rigid risk control rules … Basically, when you get down to it, to make money, you need to have an edge and employ good money management. Good money management alone isn’t going to increase your edge at all. If your system isn’t any good you’re still going to lose money, no matter how effective your money management rules are. But if you have an approach that makes money, then money management can make the difference between success and failure.

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I’m excited and confident about the future. If I ever don’t feel that way, I will stop trading.

Gil Blake has a routine of internalizing how he would feel given what might happen on the next trading day in The New Market Wizards: Conversations with America’s Top Traders.

My approach is to confront losses even before they materialize. I rehearse the process of losing. Whenever I take a position, I like to imagine what it would be like under the worst-case scenario. In doing so, I minimize the confusion if that situation actually develops. In my view, losses are a very important part of trading. When a loss happens, I believe in embracing it.

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By embracing a loss, really feeling it, I tend to have less fear about a potential loss the next time around. If I can’t get over the emotions of taking a loss in twenty-four hours, then I’m trading too large or doing something else wrong. Also, the process of rehearsing potential losses and confronting actual losses helps me adapt to increasing levels of risk over time.

Quote from an interesting article If you want to be rich, first stop being so frightened

• If you are unwilling to fail, sometimes publicly, and even catastrophically, you stand little chance of ever getting rich.
• If you care what the neighbours think, you will never get rich.
• If you cannot bear the thought of causing worry to your family, spouse or lover while you plough a lonely, dangerous road rather than taking the safe option of a regular job, you will never get rich.
• If you have artistic inclinations and fear that the search for wealth will coarsen such talents, you will never get rich. (Because you fear, in this instance, is well justified.)
• If you are not prepared to work longer hours than almost everyone you know, despite the jibes of colleagues and friends, you are unlikely to get rich.
• If you cannot convince yourself that you are “good enough” to be rich, you will never get rich.
• If you cannot treat your quest to get rich as a game, you will never be rich.
• If you cannot face up to your fear of failure, you will never be rich

Mark Weinstein have some advices for the beginning trader in Market Wizards: Interviews with Top Traders.

You have to learn how to lose; it is more important than learning how to win. If you think you are always going to be a winner, when you lose, you will develop feelings of hostility and end up blaming the market instead of trying to learn why you lost.

Over the lunch, my colleague mentioned about conspiracy stories in China stocks market. “The sell down of china market was caused by American!” …LOL..

Anyway, Michael Marcus discussed something on this topic in Market Wizards: Interviews with Top Traders.

 The foolish belief that there is conspiracy in the markets. I have known many of the great traders in the world, and I can say that 99 percent of the time, the market is bigger than anybody and, sooner or later, it goes where it wants to go. There are exceptions, but they don’t last too long.

Michael Marcus mentioned some wisdoms about life of a trader in Market Wizards: Interviews with Top Traders.

If trading is your life , it is a torturous kind of excitement. But if you are keeping your life in balance, then it is fun. All the successful traders I’ve seen that lasted in the business sooner or later got to that point. They have a balanced life; they have fun outside of trading. You can’t sustain it if you don’t have some other focus. Eventually, you wind up over trading or getting excessively disturbed about temporary failures.