IGNORE THE CORE ADVICE!
Excerpt from Alden's writings!
There is a paradox in trading that Alden sees repeated in most people. When first entering the market, everyone is looking for some arcane secret. Some divine indicator system. Some mystical price pattern. Some hidden formula reserved for the “enlightened.” Newcomers often believe that success requires something special, different, and elusive.
Then when they read the advice of legendary traders, people who have gone through decades of winning and losing, they feel disappointed. Because the advice is… too simple.
Paul Tudor Jones says, “Rule number one: don't lose money. Rule number two: Don't forget rule number one.”
Jesse Livermore reminds: “Never argue with the market. The market is always right.”
Ed Seykota says, “The trend is your friend, until it ends.”
George Soros emphasized: “It's not whether you're right or wrong that matters, what matters is how much money you make when you're right, and how much you lose when you're wrong.”
Sounds obvious. Reads like a short aphorism. And it's that simplicity that often gets overlooked by beginners.
Listening to Paul, the newcomer thought: "How can I lose money? I will quickly become rich, just sit and search for what car to buy, where to buy a house."
Listening to Livermore, the newcomer thought: "I am better than the market, I know where the market will go, I leverage x20 x50, what is there to be afraid of?"
Hearing Ed Seykota's advice, the newbie thought: "I know the trend, but I'm good at it, I'll go against the trend to make a lot of money."
Hearing Soros say that, the newcomer thought: "Why care about how much I lose, every time I go all-in I win big."
But the market is always like that, it will teach you the lesson that you must learn if you want to progress. Until your account evaporates 50%, you will understand what "don't lose money". When you argue with the trend because you think you are smarter than the market, you will understand the saying "the market is always right, the trend is your friend". When you endure losses just because your ego wants to be right all the time, you will see that "risk management" is a vital factor.
Simple advice, but it is not easy for everyone to do. You think you can cut losses, but when faced with a large negative order, your heart beats faster, then you console yourself: "It will turn around", and the loss grows bigger and bigger just because you want to argue right and wrong with the market.
Following the trend sounds simple, but when the trend is running and you stand aside, impatience will push you into the trade late, and then you will be the one buying at the top. These simple principles directly collide with human instincts: greed, fear and ego. Therefore, it is simple to understand, but extremely difficult to do.
Beginners often think, “If it were that simple, no one would fail.” But in reality, it’s the simple things that are the real obstacles. Because to do it, you have to overcome yourself.
Who wants to lose money, but to actually keep your capital, it is an art of discipline, humility and patience.
As Warren Buffett once said: “Be fearful when others are greedy, and greedy when others are fearful.” It sounds simple, but to do it, you need to be experienced enough to realize that the market always revolves around crowd emotions. Only when you have been caught up in FOMO and paid a high price, will you know how to stay out and wait for the real opportunity to appear.
This business doesn’t care how many books you read, or how many indicators you know. It’s about surviving long enough to learn the lessons and learn for yourself. Simple but hard to do. Keep your capital, be disciplined, follow the trend, manage your risk.
To the newbie, these tips may sound like slogans. But to those who have been around long enough, they are vital principles, the foundation for survival and sustainable profitability.