A plan takes the positive attributes of games (not gambling games per se but the concept of a game) and applies them to the market, giving you the structure necessary to create a discrete event.

Similarly, the trader finally faces up to the inescapable reality and “accepts” the loss, either because he “wakes up” and does something to get out of the position or, more likely, because someone or something else forces him to exit the position. In my case, it was the latter. Without force I never would have accepted, nor taken, the loss.

This means entry and exit points are derived after you have done your analysis.

that it is the characteristics displayed, not the activity itself, that define whether they are betting, gambling, speculating, trading, or investing. This lack of understanding means people are prone to exhibit the traits of betting or gambling on a continuous process (i.e., the market) rather than a discrete event where such activities belong.

we mutually congratulated each other on our wisdom and knowledge and for all the money we were now going to make—not the money we had made but the money we were going to make.

If you have ever had a position on and intended to do one thing but actually did something else, then you were a member of the psychological crowd and made a crowd trade—whether you knew it or not.

you can’t calculate the probability of a trade’s being profitable; you can only calculate your exposure. So all you can do is manage your losses, not predict profits.

One of the oldest rules of trading is: If a market is hit with very bullish news and instead of going up, the market goes down, get out if you’re long. An unexpected and opposite reaction means there is something seriously wrong with the position.

A salesperson’s goal is to make the sale; to be right by countering objections and negative feedback from the prospect. But the Speculator’s goal is to make money, not to be right or counter the negative feedback from the market. A salesman’s ego gratification from being right is precisely what the entrepreneur, Speculator, and manager must avoid.