Today's Quote: “Wisdom often consists of knowing what to do next.” Herbert Clark Hoover.

There are several good books out there about trading that should be on every trader’s must read list. If you were forced to choose one and only one, the only possible pick would be “Tools and Tactics for the Master Day Trader”. We are going to run a series of excerpts from the best selling book for the next series of lessons. Now in the words of the master trader himself, Oliver L. Velez…

“FINAL WORDS OF WISDOM FROM A TRUE MASTER” –

EIGHT ELEMENTARY LESSONS FOR LIFE AND TRADING—BY MOTHER (Part Two of Two)

Lesson 5: Never take yourself too seriously. Whenever I am on a big winning streak, I hear those words ring in my ear. Despite the fact that I win in the market nearly every day of my life, all of my in-house traders will attest to the fact that I am never too serious when I trade. In fact I'm silly, but this is because of Mom.

Lesson 6: Only fight battles you can win. From this wisdom, I learned to pick my stocks, my entries, and my exits very carefully. Whenever I enter a stock, for instance, I feel comfortable that it is on my side, ready to work for me. I try never to fight the market, because that is a battle I know I can't win. When I realize I have made a choice that conflicts with the market, I exit and immediately align myself with the power. In the Bible, David may have won his battle against Goliath. But let me tell you this. In the market, Goliath always wins.

Lesson 7: Life is not something to conquer but to befriend. This lesson from my Mom taught me to work with the market, not against it, to view it as an ally that can enrich, not as an adversary that can take away. The market is not Frankenstein. It is a friend. It is not a killer of dreams. It is a liberator of them. In short, the market is the field of all possibilities.

Lesson 8: A loss does not always make you less. Sometimes, losing is winning. Far too many day traders miss this valuable point. If I get stopped out of a stock for a $1 loss, and the stock drops another $2, I have not lost. I've won. The art of winning is determined by how intelligently you lose. Take these lessons from my Mom. She would be delighted if you used them in your daily living. I would be content if you just used them in your daily trading. But I will say that they are lessons that have served me well in every corner of my life. I hope they serve you well too.