InvivoAnalytics.com

Anyone with average intelligence can learn to trade. . . . Of the people who can learn the basics, only a small percentage will be successful traders.

If a betting game among a certain number of participants is played long enough, eventually one player will have all the money. If there is any skill involved, it will accelerate the process of concentrating all the stakes in a few hands. Something like this happens in the market. There is a persistent overall tendency for equity to flow from the many to the few. In the long run, the majority loses. The implication for the trader is that to win you have to act like the minority. If you bring normal human habits and tendencies to trading, you’ll gravitate toward the majority and inevitably lose. — William Eckhardt, interviewed in The New Market Wizards

Frank Henry’s rule of thumb was that only half of one’s financial energies should be devoted to job income. The other half ought to go into investment and speculation.

For here is the cold truth. Unless you have a wealthy relative, the only way you are ever going to lift yourself above the great unrich — absolutely the only hope you have — is to take a risk.

Yes, of course, it is a two-way street. Risk-taking implies the possibility of loss instead of gain. If you speculate with your money, you stand to lose it. Instead of ending rich, you can end poor. — Max Gunter, The Zurich Axioms

Many systematic traders spend the majority of their time searching for good places to initiate. It just seems to be part of human nature to focus on the most hopeful point of the trading cycle. Our research indicated that liquidations are vastly more important than initiations. If you initiate purely randomly, you do surprisingly well with a good liquidation criterion. . . .

. . . Our aversion to summary statistics that obliterate structure extends to the trading systems themselves. For instance, we avoid moving averages of price in making trades. Such moving averages are popular mostly because they’re mathematically tractable, but they smooth away all the structural information inherent in the price data. — William Eckhardt

There is something between up and down or black and white or good and bad–or between success and failure. It is possible for a man who has learned measure in all things to enjoy a modicum of success. He can arrive at the amount of success that for him is necessary and sufficient.

Engineers know this well. Since all engineering measurements are approximations, the framework of a problem becomes a study in how much accuracy is necessary and sufficient. It is not at all necessary, nor is it desirable, to shoot for perfection. Inability to achieve the (often impossible) perfection is not necessarily ruin or failure. — John Magee, Winning the Mental Game on Wall Street