The speculator's chief enemmies are always boring from within.It is inseparable from human natureto hope and to fear. In speculation when the market goes against you you hope tha every day will be the last day--and you lose more than you should had you not listened to the hope--to the same ally that that is so potent a sucess-bringer to empire builders and pioneers,big and little. And when the market goes your way you become fearful that the next day will take away your profit,and you get out-too soon. Fear keeps you from making as much money as you ought to.The successful trader has to fight these two deep-seated instincts.He has to reverse what you might call his natural impulses. Instead of hoping he must fear;instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss,and hope that his profit become a big profit.(P130-131)
The training of a stock trader is like a medial education. The physician has to spend long years learning anatomy,physiology,materia medica and collacteral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice. He observe and classifies all sorts of pathological phenomena. He learns to diagnose. If his diagosis is correct--and that depends uponthe accuracy of his observation--he ought to do pretty well in his prognosis,always keeping in mind,of course,that human fallibility and the utterly unforeseen will keep him scoring 100 per cent of bull's-eye. And then,as he gain in experience,he learns not only to do the right thing but to do it instantly,so that many people will think he does instinctively. It really isn't automatism. It is that he has diagnosed the ase according to his observatons of such ases during a period of many years;and ,naturrally,after he has diagnosed it,he can only treat it in the way that experience has taught him is the proper treatment.(P214)
