Trading Insights From The Famous Trader Richard Dennis

Investopaper

Richard Dennis, popularly known as the “Prince of the Pit” was a well known commodities trader. He is famous for turning $400 into $200 million in the early 1970s. However, he suffered huge losses in the stock market crash of 1987 as well as 2000. He was also featured in the book “Market Wizards” by Jack D. Schwager for his trading acumen. His insights on trading can be immensely valuable to the aspiring trader.

Here are some of the best trading quotes / insights by Richard Dennis.

Trading Insights (Quotes) From Richard Dennis

I’ve learned that markets, which are often just mad crowds, are often irrational; when emotionally overwrought, they’re almost always wrong.

A good trend following system will keep you in the market until there is evidence that the trend has changed.

You should expect the unexpected in this business; expect the extreme. Don’t think in terms of boundaries that limit what the market might do. If there is any lesson I have learned in the nearly twenty years that I’ve been in this business, it is that the unexpected and the impossible happen every now and then.

Trade small because that’s when you are as bad as you are ever going to be. Learn from your mistakes.

How much of a role does luck play in trading? In the long run, zero. Absolutely zero. I don’t think anybody winds up make money in this business because they started out lucky.

You have to minimize your losses and try to preserve capital for those very few instances where you can make a lot in a very short period of time. What you can’t afford to do is throw away your capital on sub-optimal trades.

Trading decisions should be made as unemotionally as possible.

I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.

When you have a position, you put it on for a reason, and you’ve got to keep it until the reason no longer exists.