The Best trading advice from top traders25 EditEd by brandon Clay Table of Contents

Introduction ...... 3 Bernard Baruch ...... 5 . . . Warren Buffett...... 7 Ray Dalio ...... 9 . . . . Richard Dennis...... 11 . . . . Stanley Druckenmiller...... 13 Jeremy Grantham ...... 15 . . . Ken Griffin...... 17 . . . . ...... 19 ...... 21 . . . Edward Lampert ...... 23. . . . Bill Lipschutz ...... 25 . . . Jesse Livermore...... 27 Gerald Loeb...... 29 . . . . Peter Lynch...... 31 . . . . William O’Neil ...... 33 . . . . John Paulson ...... 35 . . . Linda Raschke...... 37 Jim Rogers...... 39 . . . . Paul Rotter ...... 41 Marty Schwartz ...... 43 Ed Seykota ...... 45 ...... 47 . . . ...... 49 John Templeton ...... 51. . . . David Tepper ...... 53 . . . About Trading Story...... 54 . . . .

2 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Introduction

The best traders know how to do it.

They know because they have a solid foundation – through an apprenticeship, degrees, or some other education . They know because their theories have been tested in real-world markets . And they demonstrate their knowledge watching their trading accounts mature to near-unimaginable dimensions .

And the best traders are regular people.

Despite their tremendous trading feats, none of them started out with that success . Through vision, training, determination, and a little luck along the way, they all traveled the path of trading triumphs . Some came from humble beginnings like George Soros . He grew up in Hungary during World War 2 – barely escaping the Nazi dragnet . Others came from more reputable families, like Warren Buffett, the only son of a US Congressman . Whatever the case, these top traders became the best in spite of their upbringing .

But the best traders are NOT always right.

They don’t have to be . You’ll see their admitted ignorance about the next market move . But because of the way they handle account, it doesn’t matter . Over time, they employed proven methods in the market and navigated to healthy profits .

Finally, the best traders tend to be more aware of life.

They understand their weaknesses and address them . They see opportunities and act on them . They appreciate that life is more than trading . Most are involved in philanthropy . Their advice may not always relate directly to trading, but their guidance can still help a well- rounded trader .

We hope their market-tested wisdom proves helpful on your journey to consistent trading returns .

All the best!

BrandonTRADING STORY Clay

3 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Don’t try to be a jack of all investments. Stick to the field you know best.

- BERNARD BARUCH Bernard Baruch

Bernard Mannes Baruch (August 19, 1870 – June 20, 1965) was an American financier, stock investor, philanthropist, statesman, and political consultant. After his success in business, he devoted his time toward advising U.S. Presidents Woodrow Wilson and Franklin D. Roosevelt on economic matters and became a philanthropist.

Beware of barbers, beauticians, waiters — of anyone — bringing gifts of “inside” information or “tips ”.

Don’t speculate unless you can make it a full-time job .

Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth .

Don’t try to buy at the bottom and sell at the top . This can’t be done — except by liars .

Learn how to take your losses quickly and cleanly . Don’t expect to be right all the time . If you have made a mistake, cut your losses as quickly as possible .

Don’t buy too many different securities . Better have only a few investments which can be watched .

Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects .

Study your tax position to know when you can sell to greatest advantage .

Always keep a good part of your capital in a cash reserve . Never invest all your funds .

REFERENCES: thereformedbroker.com, wikipedia.org, geh.org

5 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.

- WARREN BUFFET Warren Buffett

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He was the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway, and consistently ranked among the world’s wealthiest people.

Nothing sedates rationality like large doses of effortless money .

The most important quality for an investor is temperament, not intellect . You need a temperament that neither derives great pleasure from being with the crowd or against the crowd .

Successful Investing takes time, discipline and patience . No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant .

Opportunities come infrequently . When it rains gold, put out the bucket, not the thimble Diversification is a protection against ignorance . It makes very little sense for those who know what they’re doing . The difference between successful people and really successful people is that really successful people say no to almost everything .

I’ve seen more people fail because of liquor and leverage — leverage being borrowed money . You really don’t need leverage in this world much . If you’re smart, you’re going to make a lot of money without borrowing .

What an investor needs is the ability to correctly evaluate selected businesses . Note that word “selected”: You don’t have to be an expert on every company, or even many . You only have to be able to evaluate companies within your circle of competence . The size of that circle is not very important; knowing its boundaries, however, is vital .

REFERENCES: fool.com, wikipedia.org, jackflacco.wordpress.com, wallstreetdaily.com

7 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS I believe that for the most part, achieving success — whatever that is for you — is mostly a matter of personal choice and that, initially, making the right choices can be difficult.

- RAY DALIO Ray Dalio

Ray Dalio (born August 1, 1949) is an American businessman and founder of the investment firm Bridgewater Associates. In 2012, Dalio appeared on the annual Time 100 list of the 100 most influential people in the world. In 2011 and 2012 he was listed by Bloomberg Markets as one of the 50 Most Influential people.

I believe that one of the best ways of getting at truth is reflecting with others who have opposing views and who share your interest in finding the truth rather than being proven right .

Be wary of the arrogant intellectual who comments from the stands without having played on the field .

More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively .

By and large, life will give you what you deserve and it doesn’t give a damn what you like . So it is up to you to take full responsibility to connect what you want with what you need to do to get it, and then to do those things .

Since the only way you are going to find solutions to painful problems is by thinking deeply about them — i .e ., reflecting — if you can develop a knee-jerk reaction to pain that is to reflect rather than to fight or flee, it will lead to your rapid learning/evolving .

Successful people ask for the criticism of others and consider its merit .

There are far more good answers “out there” than there are in you .

When you think that it’s too hard, remember that in the long run, doing the things that will make you successful is a lot easier than being unsuccessful .

REFERENCES: exploringmarkets.com, wikipedia.org, dealbreaker.com, barrons.com

9 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Trading decisions should be made as unemotionally as possible. - Richard Dennis Richard Dennis

Richard J. Dennis, a commodities speculator once known as the “Prince of the Pit,” was born in Chicago, in January, 1949. In the early 1970s, he borrowed $1,600 and reportedly made $200 million in about ten years. When a futures trading fund under his management incurred significant losses in the stock market crash of 1987 he retired from trading for several years.

When you have a destabilizing loss, get out, go home, take a nap, do something, but put a little time between that and your next decision .

Trading has taught me not to take the conventional wisdom for granted . What money I made in trading is testimony to the fact that the majority is wrong a lot of the time . The vast majority is wrong even more of the time . I’ve learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they’re almost always wrong .

You can’t have a standard attitude about money and do well in this business . What do I mean by that? Well, my father, for in- stance, worked for the city of Chicago for 30 years, and he once had a job shoveling coal . So, just imagine coming from his frame of reference, and thinking about losing $50 in a few seconds trading commodities . To him, that means another eight hours shoveling coal . That’s a standard attitude about money .

The key is consistency and discipline . Almost anybody can make up a list of rules that are 80% as good as what we taught . What they can’t do is give people the confidence to stick to those rules even when things are going bad .

I would write down observations and think about them . I thought about everything I was doing . I could trade without knowing the name of the market .

Whatever method you use to enter trades, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend .

REFERENCES: investoquotia.com , turtletrader.com, wikipedia.org, forex-cricket.blogspot.com, vignette2.wikia.nocookie.net

11 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.

- STANLEY DRUCKENMILLER Stanley Druckenmiller

Stanley Freeman Druckenmiller (born June 14, 1953) is an American manager, he is the former Chairman and President of Duquesne Capital, which he founded in 1981. He closed the fund in August 2010 because he felt unable to deliver high returns to his clients. At the time of closing, Duquesne Capital had over $12 billion in assets.

The way to attain truly superior long-term returns is to grind it out until you’re up 30 or 40 percent, and then if you have the conviction, go for a 100 percent year . If you can put together a few near-100 percent years and avoid down years, then you can achieve really outstanding long-term returns .

But the bigger you get, the harder it becomes to implement a pure trading style . Size becomes a headache in that it’s an impediment to getting in quickly, and sometimes an even bigger impediment to getting out .

I thought random walk was bullshit… The whole idea that an individual can’t make serious money with a competitive edge over the rest of the market is wacko .

The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge . Because I think there are certain situations where you can absolutely understand what motivates every buyer and seller and have a pretty good picture of what’s going to happen . And it just requires an enormous amount of grunt work and dedication to finding all possible bits of information .

It is not whether you are 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 .

REFERENCES: prudentwealth.com , mercenarytrader.com, wikipedia.org, valuewalk.com, smh.com.au

13 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Leverage reduces the investor’s critical asset: patience. It encourages financial aggressiveness, recklessness and greed.

- JEREMY GRANTHAM Jeremy Grantham

Jeremy Grantham (born on October 6, 1938) is a British investor and co-founder and chief investment strategist of Grantham Mayo van Otterloo (GMO), a Boston- based asset management firm. GMO is one of the largest managers of such funds in the world, having more than US $112 billion in assets under management as of September 2013.

I got wiped out personally in 1968, which was the last really crazy, silly stock market before the Internet era… .After 1968, I became a great reader of history books . I was shocked and horrified to discover that I had just learned a lesson that was freely available all the way back to the South Sea Bubble .

All bubbles break; all investment frenzies pass . The market is gloriously inefficient and wanders far from fair price, but eventually, after breaking your heart and your patience … it will go back to fair value . Your task is to survive until that happens .

The more investments you have and the more different they are, the more likely you are to survive those critical periods when your big bets move against you .

The individual is far better positioned to wait patiently for the right pitch while paying no regard to what others are doing .

It is utterly imperative that you know your limitations as well as your strengths and weaknesses…you must know your pain and patience thresholds accurately and not play over your head . If you cannot resist temptation, you absolutely must not manage your own money .

On the other hand, if you have patience, a decent pain threshold, an ability to withstand herd mentality, perhaps one credit of college-level math and a reputation for common sense, then go for it . In my opinion, you hold enough cards and will beat most professionals (which is sadly, but realistically, a relatively modest hurdle) and may even do very well indeed ”.

REFERENCES: marketwatch.com , prudentwealth.com, wikipedia.org, investwithalex.com, barrons.com

15 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Capital markets reward you for what you learn that other people have yet to ascertain. Investors who find the best businesses to put their money behind are rewarded for their research.

- KEN GRIFFIN Ken Griffin

Kenneth C. Griffin (born October 15, 1968) is an American hedge fund manager. Griffin is the founder and CEO of Citadel, a global investment firm.[3][4] With an estimated $24 billion in investment capital as of September 2014, Citadel is one of the world’s largest alternative investment management firms. Citadel’s group of hedge funds rank among the largest and most successful hedge funds in the world.

Risk is what you make of it .

. . my advice to every student who is trying to make a decision for the years immediately after graduation: take the opportunity that in your mind is the most rewarding, that you are most passionate about and that you find most interesting and save the rest of your life for being risk averse . Whatever you want to do, this is the time to pursue it . Twenty years from now, your freedom to take risks will be limited .

We’re subject to the same forces of capitalism that have built the entire American economy . Strong returns induce more capital flow, which creates more competitors, and you have to evolve and get better, or you die .

Size is a double-edged sword with great advantages and disadvantages .

We don’t have a good legal justification for breaking up the banking system . But if I could wave a magic wand, I’d break up the banking system .

REFERENCES: brainyquote.com , yourdictionary.com, wikipedia.org, dealbreaker.com, trbimg.com

17 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Risk control is the most important thing in trading.

- PAUL TUDOR JONES Paul Tudor Jones

Paul Tudor Jones II (born September 28, 1954), is the founder of Tudor Investment Corporation, a private asset management company and hedge fund. As of March 2014, he was estimated to have a net worth of $4.3 billion by Forbes Magazine.

Markets have consistently experienced “100-year events” every five years . While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it . I see the younger generation hampered by the need to understand and rationalize why something should go up or down . Usually, by the time that becomes self-evident, the move is already over .

That cotton trade was almost the deal breaker for me . It was at that point that I said, ‘Mr . Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?’ If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading . If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in .

I look for opportunities with tremendously skewed reward-risk opportunities . Don’t ever let them get into your pocket – that means there’s no reason to leverage substantially . There’s no reason to take substantial amounts of financial risk ever, because you should always be able to find something where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum draw down pain and maximum upside opportunities .

I believe the very best money is made at the market turns . Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle . Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms .

REFERENCES: ivanhoff.com, wikipedia.org, forbes.com, forbes.com

19 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Risk management is the most important thing to be well understood.

- BRUCE KOVNER Bruce Kovner

Bruce Stanley Kovner (born 1945 in , New York) is an American businessman. He is Chairman of Caxton Alternative Management LP, which he established in January 2012 to manage his investment, trading and business activities. From 1983 through 2011, Kovner was Founder and Chairman of Caxton Associates, LP, a diversified trading company.

Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature .—

First, I would say that risk management is the most important thing to be well understood . Undertrade, undertrade, undertrade, undertrade is my second piece of advice . Whatever you think your position ought to be, cut it at least in half . My experience with novice traders is that they trade three to five times too big . They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks .

In a bear market, you have to use sharp countertrend rallies to sell . Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose .

I’m not sure one can really define why some traders make it, while others do not . For myself, I can think of two important elements . First, I have the ability to imagine configurations of the world different from today and really believe it can happen . I can imagine that soybean prices can double or that the dollar can fall to 100 yen . Second, I stay rational and disciplined under pressure .

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 . For example, if the market is in the midst of a trading range, it makes no sense to put your stop within that range, since you are likely to be taken out . I always place my stop beyond some technical barrier .

REFERENCES: curatedalpha.com , chinese-school.netfirms.com, wikipedia.org, forbes.com, forbes.com

21 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS In investing, you constantly make decisions under conditions of uncertainty.

- EDWARD LAMPERT Edward Lampert

Edward Scott Lampert (born July 19, 1962) is an American businessman and investor. He is the chairman and CEO of Sears Holdings (SHLD) and founder, chairman, and CEO of ESL Investments. Until May 2007 he was a director of AutoNation, Inc. He previously served as a director of AutoZone, Inc. from July 1999 to October 2006.

If you’re unwilling to try new things and to fail and learn, you don’t have a shot .

If you don’t have a clue, why invest?

The entrance strategy is actually more important than the exit strategy .

I’m not from a retail background, but I am a shopper .

You either adapt or you die .

I want to be with people who can challenge me to be better .

Average investors like themes . A lot of times you pay a high price for the vision, and you can lose 80 percent of your money .

The pushback I get is, ‘He’s a hedge fund guy ’. Full stop . Some places, that can be a badge of honor . In others, it’s almost a term of derision .

We will not simply throw money behind any concept, but instead will test, evaluate, refine and ‘prove the math’ so that the investment is justified before we make it .

We expect to make mistakes as a company going forward, but we will acknowledge these mistakes, correct them and learn from them .

REFERENCES: brainyquote.com, quoteswise.com, wikipedia.org, nypost.com, businessweek.com

23 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS The whole game of trading is to continuously work for an edge.

- BILL LIPSCHUTZ Bill Lipschutz

Bill Lipschutz is a foreign exchange market (forex) trader and the co-founder and Director of Portfolio Management at Hathersage Capital Management. He was also the former Global Head of Foreign Exchange at , where he worked from 1981 to 1990.

If most traders would learn how to sit on their hands 50% of the time, they would make a lot more money .

There are a million ways to structure the trade and the devil is in the detail . You could have the dead right idea and lose money . If your timing is slightly off, you could lose . You have to structure your trade in a manner that increases your probability, your upside, and decreases your downside

The whole game of trading is to continuously work for an edge . Continually take the high probability bets . Take those all the time, and by definition you will come out ahead, as long as your risk of ruin is low enough so that you do not get blown out with any one or two or three bad bets, a bad streak .

You have to be aware of all these technical techniques, such as momentum, because a lot of market participants use them and so they can affect the market .

You very seldom see very bright, insightful people who are also really hard-working, with a real work ethic . You look among the top traders – they are both . They are very smart, insightful and very hard working, and very organized . They may appear to be scatterbrained, but they are not .

You see plenty of really bright people who don’t make it as long-term successful traders because they are not willing to put in the time . If a trader is motivated by the money, then it is the wrong reason . A truly successful trader has got to be involved and into the trading, the money is the side issue… The principal motivation is not the trappings of success . It’s usually the by-product – simply stated ‘the game’s the thing’ .

REFERENCES: whatheheckaboom.wordpress.com, wikipedia.org, kediriforex.com, hdwallpapers.in

25 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Emotional control is the most essential factor in playing the market.

- JESSE LIVERMORE Jesse Livermore

Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940), also known as the Boy Plunger and the Great Bear of , was an American stock trader. He was famed for making and losing several multi-million dollar fortunes and short selling during the stock market crashes in 1907 and 1929.

Wall Street never changes . The pockets change, the suckers change, the stocks change, but Wall Street never changes because human nature never changes .

The stock market is never obvious . It is designed to fool most of the people, most of the time .

The game of speculation is the most uniformly fascinating game in the world . But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer . They will die poor .

The only thing to do when a person is wrong is to be right, by ceasing to be wrong . Cut your losses quickly, without hesitation . Don’t waste time . When a stock moves below a mental-stop, sell it immediately .

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 .

Emotional control is the most essential factor in playing the market . Never lose control of your emotions when the market moves against you . Don’t get too confident over your wins or too despondent over your losses .

All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope . That is why the numerical formations and patterns recur on a constant basis . There is nothing new on Wall Street or in stock speculation . What has happened in the past will happen again, and again, and again .

REFERENCES: joefahmy.com , prudent wealth.com, wikipedia.org, finance.yahoo.com, zerohedge.com

27 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS The most important single factor in shaping security markets is public psychology.

- GERALD LOEB Gerald Loeb

Gerald Loeb (July 1899 – April 13, 1974) was a founding partner of E.F. Hutton & Co., a renowned Wall Street trader and brokerage firm. He was the author of the books The Battle For Investment Survival and The Battle For Stock Market Profits. Loeb promoted a view of the market as too risky to hold stocks for the long term in contrast to well-known value investors.

To make money in the stock market you either have to be ahead of the crowd or very sure they are going in the same direction for some time to come . Accepting losses is the most important single investment device to insure safety of capital .

The difference between the investor who year in and year out procures for himself a final net profit, and the one who is usually in the red, is not entirely a question of superior selection of stocks or superior timing . Rather, it is also a case of knowing how to capitalize successes and curtail failures .

If there is anything I detest, it’s a mechanistic formula for anything . People should use their heads and go by logic and reason, not by hard and fast rules . In addition to many other contributing factors of inflation or deflation, a very great factor is the psychological . The fact that people think prices are going to advance or decline very much contributes to their movement, and the very momentum of the trend itself tends to perpetuate itself .

Profits can be made safely only when the opportunity is available and not just because they happen to be desired or needed . . . Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to success in the battle for investment survival .

I feel all relevant factors, important and otherwise, are registered in the market’s behavior, and, in addition, the action of the market itself can be expected under most circumstances to stimulate buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in advance of its actual occurrence . . The market is better at predicting the news than the news is at predicting the market .

REFERENCES: prudentwealth.com, ivanhoff.com, wikipedia.org, anderson.ucla.edu, wikipedia.org

29 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Investing is fun, exciting, and dangerous if you don’t do any work.

- PETER LYNCH Peter Lynch

Peter Lynch (born January 19, 1944) is an American businessman and stock investor. As the manager of the Magellan Fund at Fidelity Investments between 1977 and 1990, Lynch averaged a 29.2% annual return, consistently more than doubling the S&P 500 market index and making it the best performing mutual fund in the world. During his tenure, assets under management increased from $18 million to $14 billion.

Never invest in any idea you can’t illustrate with a crayon .

Gentlemen who prefer bonds don’t know what they are missing .

Never invest in any idea you can’t illustrate with a crayon .

You can’t see the future through a rearview mirror .

There’s no point paying Yo-Yo Ma to play a radio .

When yields on long-term government bonds exceed the dividend yield of the S&P 500 by 6 percent or more, sell your stocks and buy bonds . The best stock to buy may be the one you already own . Never bet on comeback while they’re playing “Taps” .

If you like the store, chances are you’ll love the stock .

When insiders are buying, it’s a good sign - unless they happen to be New England bankers .

In business, competition is never as healthy as total domination .

All else being equal, invest in the company with the fewest color photographs in the annual report .

Over the past three decades, the stock market has come to be dominated by a herd of professional investors . Contrary to popular belief, this makes it easier for the amateur investor . You can beat the market by ignoring the herd .

REFERENCES: rbcpa.com, wikipedia.org, thesquander.com, whartonny.com

31 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Stop listening to and being influenced by friends, associates, and the continuous array of experts’ personal opinions on daily TV shows.

- WILLIAM O’NEIL William O’Neil

William J. O’Neil (born March 25, 1933) is an American entrepreneur, stockbroker and writer, who founded the business newspaper Investor’s Business Daily and the stock brokerage firm William O’Neil & Co. Inc.

The most successful stocks from 1880 to the present show that, contrary to most investors’ beliefs, P/E ratios were not a relevant factor in price movement and have very little to do with whether a stock should be bought or sold .

Broad diversification is plainly and simply a hedge for ignorance… The best results are usually achieved through concentration, by putting your eggs in a few baskets that you know well and watching them very carefully .

If you buy a stock at $40, then buy more at $30 and average out your cost at $35, you are following up your losers and throwing good money after bad . This amateur strategy can produce serious losses and weigh down your portfolio with a few big losers .

Learn to read charts and recognize proper bases and exact buy points . Use daily and weekly charts to materially improve your stock selection and timing .

Most people should not buy common stocks for their dividends or income, yet many people do .

Only buy stocks that have at least a few institutional sponsors with better-than-average recent performance records, and invest in stocks showing an increasing total number of institutional owners in recent quarters .

The first step in learning to pick big stock market winners is for you to examine leading big winners of the past to learn all the characteristics of the most successful stocks . You will learn from this observation what type of price patterns these stocks developed just before their spectacular price advances .

REFERENCES: quotationsource.com , wallstcheatsheet.com, wikipedia.org, artremiscapital.us, investors.com

33 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS No one strategy is correct all the time.

- JOHN PAULSON John Paulson

John Alfred Paulson (born December 14, 1955) is an American hedge fund manager and billionaire who heads Paulson & Co., a New York-based investment management firm he founded in 1994. He has been called “one of the most prominent names in high finance” and “a man who made one of the biggest fortunes in Wall Street history”.

I had to swallow my pride, buckle down the hatches, and just be patient .

Fear-driven periods in the past have been used as buying opportunities for savvy investors .

Many investors make the mistake of buying high and selling low while the exact opposite is the right strategy to outperform over the long term .

Our goal is not to outperform all the time – that’s not possible . We want to outperform over time .

Investors that do the best, and have done the best, are those that stay and compound at above-average rates over the long term .

Chairman Waxman, the problem in the U .S . financial system is one of solvency . In general, financial institutions are undercapitalised and have insufficient tangible common equity to support their overlevered and deteriorating balance sheets .

I realized that if I wanted to get into the top leagues, it would have to be by performance .

I got a piggy bank and the goal was to fill it up…

REFERENCES: quoteswise.com, wikipedia.org, paulsonco.com, dealbreaker.com

35 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Successful traders who have demonstrated longevity in this business have one thing in common: a consistent methodology with a demonstrable edge. You cannot trade profitably over the long run without an edge.

- LINDA RASCHKE Linda Raschke

Linda Bradford Raschke is a commodities and futures trader who is President of LBRGroup, Inc., a registered CTA and money management firm and president of LBR Asset Management, a Commodity Pool Operator.

Ultimately, the best traders don’t try to figure out all of the market’s peculiarities . They follow their methodology and find great mental freedom in following their rules and structure .

Most professional traders are “bean counters” . Steady profitable trades add up quickly . A trader must accept that the main things that count are the small trades that build up your equity . It’s not your analysis that counts; it’s your daily equity curve .

A trader must be able to continue to pull the trigger on trades and avoid making impulsive or sloppy trades where there is no edge .

There are four basic principles of price behavior which have held up over time . Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach . The following four principles can be modeled and quantified and hold true for all time frames, all markets . The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior . Charles Dow was one of the first to touch on them in his writings .

Principle One: A Trend Has a Higher Probability of Continuation than Reversal

Principle Two: Momentum Precedes Price

Principle Three: Trends End in a Climax

Principle Four: The Market Alternates between Range Expansion and Range Contraction

REFERENCES: informedtrades.com, wikipedia.org, lindaraschke.net, lindaraschke.net

37 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS I was poor once, I didn’t like it, I don’t want to be poor again.

- JIM ROGERS Jim Rogers

James Beeland “Jim” Rogers, Jr. (born October 19, 1942) is an American businessman, investor and author. He is currently based in Singapore. Rogers is the Chairman of Rogers Holdings and Beeland Interests, Inc. He was the co-founder of the Quantum Fund and creator of the Rogers International Commodities Index (RICI).

Never act upon wishful thinking . Act without checking the facts, and chances are that you will be swept away along with the mob .

Not one country in existence today has had the same borders and government for as long as two hundred years . The world will continue changing .

If anybody laughs at your idea, view it as a sign of potential success!

Acknowledge the complexity of the world and resist the impression that you easily understand it . People are too quick to accept conventional wisdom, because it sounds basically true and it tends to be reinforced by both their peers and opinion leaders, many of whome have never looked at whether the facts support the received wisdom . It’s a basic fact of life that many things “everybody knows” turn out to be wrong .

If the world economy gets better, commodities are very good place to be in . . even if the world economy does not improve, commodities are still a fabulous place to be .

The most sensible skill that I can give to somebody born in 2003 is a perfect command of Mandarin .

REFERENCES: goodreads.com , businessinsider.com, wikipedia.org, bullmarketthinking.com, senatus.net

39 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS As a trader you should have no opinion. The more opinion you have, the harder it gets to get out of a losing position.

- PAUL ROTTER Paul Rotter

Paul Rotter is something of a legend among scalp traders with a penchant for the German government bond market. At the height of his scalping career he would sometimes trade as many as 1 million contracts a day with a more normal turnover of a still very significant 100,000-200,000 daily contracts.

I constantly try to read the psychology of the market and base my decisions on it .

When some sudden unexpected event occurs, it could blow out a lot of traders even though their risk models were working just fine for a long period .

Before the open I check all the economic reports that are about to be released, speeches of central bankers – simply anything that can move the market . Then I try to define important levels in the markets I trade .

I think the best place for traders right now is Singapore – it is growing rapidly and has a great lifestyle, very safe, with the best schools and world- class infrastructure .

Generally, I like markets with high liquidity .

In my opinion, a single player cannot influence the market around the clock .

REFERENCES: mahifx , investoquotia.com, forex-surabaya.blogspot.com, seputarforex.com, voss-photography.com

41 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS I’ve said it before, and I’m going to say it again, because it cannot be overemphasized: the most important change in my trading career occurred when I learned to divorce my ego from the trade.

- MARTY SCHWARTZ Marty Schwartz

Martin S. Schwartz (Buzzy) (born 1945) is a Wall Street trader who made his fortune successfully trading stocks, futures and options. He received national attention when he won the U.S. Investing Championship in 1984. He is the author of Pit Bull: Lessons from Wall Street’s Champion Day Trader.

I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just luck . Rather your position is most likely correct and should not only be held but perhaps added to

I always laugh at people who say “I’ve never met a rich technician” I love that! Its such an arrogant, nonsensical response . I used fundamentals for 9 years and got rich as a technician .

I’m more concerned about controlling the downside . Learn to take the losses . The most important thing about making money is not to let your losses get out of hand .

I’ve said it before, and I’m going to say it again, because it cannot be overemphasized: the most important change in my trading career occurred when I learned to divorce my ego from the trade . Trading is a psychological game . Most people think that they’re playing against the market, but the market doesn’t care . You’re really playing against yourself . You have to stop trying to will things to happen in order to prove that you’re right . Listen only to what the market is telling you now . Forget what you thought it was telling you five minutes ago . The sole objective of trading is not to prove you’re right, but to hear the cash register ring .

The market does not know if you are long or short and could not care less . You are the only one emotional involved with your position . The market is just reacting to supply and demand and if you are cheering it one way, there is always somebody else cheering it just has hard that it will go the other way .

REFERENCES: tischendorf.com, trading-naked.com, decodingwallstreet.blogspot.com, wikipedia.org, timesunion.com, stockjocknroll.com

43 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Risk no more than you can afford to lose and also risk enough so that a win is meaningful.

- ED SEYKOTA Ed Seykota

Edward Arthur Seykota (born August 7, 1946) is a commodities trader, who earned S.B. degrees in Electrical Engineering from MIT and Management from the MIT Sloan School of Management, both in 1969. In 1970 he pioneered Systems trading by using early punched card computers to test ideas on trading the markets.

Win or lose, everybody gets what they want out of the market . Some people seem to like to lose, so they win by losing money .

To avoid whipsaw losses, stop trading .

Trend following is an exercise in observing and responding to the ever- present moment of now .

Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking better the more it goes against them .

Until you master the basic literature and spend some time with successful traders, you might consider confining your trading to the supermarket .

I don’t predict a non-existing future .

The aha! process lies at the heart of price change . For instance, consider the series: OTTFFSSE . What is the next letter? This puzzle creates tension – until you see the first letters of the ordinal numbers – one, two . Aha! you say . A lot happens during an aha . The puzzle dies and the tension dissipates . A societal aha! drives price . Read the newspapers and the news magazines during a major move . At first, no one gets why the move is happening . There’s a lot of confusion . Part of the move’s way up, some people get it . At the end, everybody gets it . The tension is resolved and the move ends .

REFERENCES: trendfollowing.com, wikipedia.org, asxmarketwatch.com, turtletrader.com

45 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS I’m only rich because I know when I’m wrong… I basically have survived by recognizing my mistakes.

- GEORGE SOROS George Soros

George Soros born August 12, 1930, is a Hungarian-born American business magnate, investor, and philanthropist. He is the chairman of . He is known as “The Man Who Broke the ” because of his short sale of US$10 billion worth of pounds, giving him a profit of $1 billion during the 1992 Black Wednesday UK currency crisis. Soros is one of the thirty richest people in the world.

Economic history is a never-ending series of episodes based on falsehoods and lies, not truths . It represents the path to big money . The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited .

If investing is entertaining, if you’re having fun, you’re probably not making any money . Good investing is boring .

The financial markets generally are unpredictable . So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market .

Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected .

The worse a situation becomes, the less it takes to turn it around, and the bigger the upside

Stock market bubbles don’t grow out of thin air . They have a solid basis in reality, but reality as distorted by a misconception

I contend that financial markets never reflect the underlying reality accurately; they always distort it in some way or another and the distortions find expression in market prices .

Unfortunately, the more complex the system, the greater the room for error .

REFERENCES: seekingalpha.com , wealthlift.com, wikipedia.org, georgesoros.com, agendaeurope.wordpress.com

47 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS A good trader has to have three things: a chronic inability to accept things at face value, to feel continuously unsettled, and to have humility.

- MICHAEL STEINHARDT Michael Steinhardt

Michael H. Steinhardt (born December 7, 1940) is an American hedge fund manager, financier, investor, newspaper publisher, and philanthropist active in Jewish causes. He was one of the first prominent hedge fund managers, and is a graduate of the Wharton School of the University of . He founded Steinhardt, Fine, Berkowitz & Co., a hedge fund, in 1967.

The more tough lessons you learn early on, the fewer (bigger) errors you make later . A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you something .

Devote your full intensity for success over the long-term .

Do constant research on subjects that make you money . Plow through the data so as to be able to sense a major change coming in the macro situation .

Investors never have all the data they need before they put their money at risk . Investing is all about decision-making with imperfect information . You will never have all the info you need . What matters is what you do with the information you have . Do your homework and focus on the facts that matter most in any investing situation .

Intuition is more than just a hunch — it resembles a hidden supercomputer in the mind that you’re not even aware is there . It can help you do the right thing at the right time if you give it a chance . Over time, your own trading experience will help develop your intuition so that major pitfalls can be avoided .

You only have so much time and energy so when you put your money in play . So, if you’re going to put money at risk, make sure the reward is high enough to justify it .

REFERENCES: ritholtz.com, thinkexist.com, wikipedia.org, jeconline.com, bloomberg.com

49 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS If you begin with a prayer, you can think more clearly and make fewer mistakes.

- JOHN TEMPLETON John Templeton

Sir John Marks Templeton (29 November 1912 – 8 July 2008) was an American-born British stock investor, businessman and philanthropist. He rejected for stock trading, preferring instead to use fundamental analysis. Money magazine in 1999 called him “arguably the greatest global stock picker of the century”.

Don’t gamble . Buy some good stock . Hold it till it goes up…and then sell it . If it doesn’t go up, don’t buy it!

But, if you buy the same securities everyone else is buying, you will have the same results as everyone else . By definition, you can’t outperform the market if you buy the market . And chances are if you buy what everyone is buying you will do so only after it is already overpriced .

A wise investor knows that the stock market is really a market of stocks . While individual stocks may be pulled along momentarily by a strong bull market, ultimately it is the individual stocks that determine the market, not vice versa .

Expect and react to change . No bull market is permanent . No bear market is permanent . And there are no stocks that you can buy and forget . The pace of change is too great .

The only way to avoid mistakes is not to invest—which is the biggest mistake of all . So forgive yourself for your errors . Don’t become discouraged, and certainly don’t try to recoup your losses by taking bigger risks . Instead, turn each mistake into a learning experience . Determine exactly what went wrong and how you can avoid the same mistake in the future .

Do not be fearful or negative too often .

Never invest on sentiment . The company that gave you your first job, or built the first car you ever owned, or sponsored a favorite television show of long ago may be a fine company . But that doesn’t mean its stock is a fine investment . Even if the corporation is truly excellent, prices of its shares may be too high .

REFERENCES: franklintempleton.com, wikipedia.org, templeton.org

51 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS Those who keep their heads while others are panicking do well.

- DAVID TEPPER

52 | THE BEST TRADING ADVICE FROM 25 TOP TRADERS David Tepper

David Alan Tepper (born September 11, 1957) is an American hedge fund manager and the founder of Appaloosa Management. His investment specialty is distressed companies. He earned his BA in Economics from the University of in 1978 and his MBA (then known as an MSIA) from the Tepper School of Business (then known as GSIA) of Carnegie Mellon University in 1982.

We don’t really buy high-flyers . We buy before they get high-flyers .

The media says that hedge funds are the new masters of the universe… We’re just a bunch of schmucks .

I have too much money to quit .

The more I make, the more I’ll give away .

We keep our cool when others don’t . The point is, markets adapt . People adapt . Don’t listen to all the crap out there .

[On going in the 1987 stock market crash] Going into the crash I had set up my entire portfolio as just short – I had no long positions . I made a fortune during and after the crash . It was very cool .

[From 1995 during the Latin America crisis] As soon as money started coming back in the country, that market too off . So we were able to figure out the right variable, to look at the right thing to focus on . And when it changed, we were fairly early and we were able to make a lot of money .

[On losing 29% and $80 million on Russia when Russia defaulted after a IMF deal (International Monetary Fund)] It was definitely the biggest screw-up of my career .

[On replaying his losses in his head] It is the only way you learn from your mistakes .

I’m not tepid, I’m Tepper .

REFERENCES: quoteswise.com, wikipedia.org, institutionalinvestorsalpha.com, nymag.com

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