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Trading Tips and Quotes From 9 Famous Traders: One Lesson From Each
By Spencer Li, CFTe · Last updated 17 October 2026
One lesson from each of 9 famous traders, where they agree, and where they flatly disagree.
You have probably read a list of trading quotes before. You nod along to Livermore, scroll on to Buffett, and by Monday morning none of it has changed a single trade.
The trading tips of famous traders come down to 3 ideas that repeat across almost every name on this page. Cut your losses while they are small, let the winning trades run, and manage your own fear and greed before you try to manage the market. The 9 traders below say it in 9 different ways, from a stock speculator born in 1877 to a psychiatrist who became a trader. Each one gets a one-line takeaway here, a quote taken from their own page on this site, and a link to the full set of their tips.
The short versions are in the table first. After that, I'm going to group the traders by the lesson they share, and then show you where they disagree, because the disagreements tell you which tip actually fits the way you trade.
| Trader | Known for | The one-line takeaway |
|---|---|---|
| Jesse Livermore | stock speculator, 1877 to 1940 | The money is made by holding a winning position through the main move, rather than trading every wiggle. |
| Ed Seykota | early computerised trend follower | Take the small loss now, or the market will hand you a much bigger one later. |
| Paul Tudor Jones | macro trader, Tudor Investment Corporation | Play defence first: assume every position is wrong and know your exit before you need it. |
| Richard Dennis | commodities trader, the Turtle Traders experiment | Good rules are common. Sticking to them through a losing run is the rare part. |
| Nicolas Darvas | dancer turned stock trader, the Box System | Buy the stock that breaks into new highs, and let a stop-loss decide when you are wrong. |
| Alexander Elder | psychiatrist turned trader, Trading for a Living | Mind, Method and Money: if any of the 3 is weak, the whole thing falls over. |
| George Soros | hedge fund manager, the 1992 bet against the pound | What counts is how much you make when right and how much you lose when wrong. |
| William O'Neil | founder of Investor's Business Daily, CAN SLIM | Pull the weeds early: sell the losers fast and leave the winners alone. |
| Warren Buffett | investor, ran Berkshire Hathaway for decades | Know what a business is worth before you care what it costs. |
Chapter 1 of 6
Why does almost every famous trader start with cutting losses?
Ask a famous trader for their best tip and the answer is almost never about finding trades. It is about losing less on the bad ones.
Ed Seykota, one of the early traders to run trend-following rules on a computer, was once asked for the elements of good trading. He gave 3 rules, and all 3 were "cut losses." His longer version is the one people remember: "If you can't take a small loss, sooner or later you will take the mother of all losses." The takeaway is that a small loss is the fee for staying in the game, and refusing to pay it is how accounts get blown up.
William O'Neil founded Investor's Business Daily and built the CAN SLIM stock-picking method. He used a gardening picture for the same idea: "The stocks that go up the most from where you bought them are your flowers; those that are down from where you bought them are your weeds. If weeds appear, don't hesitate to reach for the trowel." His summary line is blunter: "The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you're wrong."
Paul Tudor Jones takes it one step further. He starts from the assumption that he is already wrong: "Everyday I assume every position I have is wrong. I know where my stop risk points are going to be." And when a position starts to hurt, his fix is short: "If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in."
So why do the people who made the most money talk the most about losing it? Well, a loss compounds against you. Suppose your account falls 50%. You now need a 100% gain on what is left just to get back to where you started.
| If your account falls by | You need this gain to get back to even |
|---|---|
| 10% | about 11% |
| 25% | about 33% |
| 50% | 100% |
The arithmetic: a 10% loss leaves 90, and 90 has to grow by 10, which is 10 divided by 90, or about 11%. A 25% loss leaves 75, which needs 25 more, about 33%. A 50% loss leaves 50, which needs another 50, a full 100%. The deeper the hole, the faster the climb out gets steeper, which is why all 3 of these traders cut early, while the hole is still shallow.
Personally, this was one of the 3 Livermore rules I picked out in a 2017 post, and I still think cutting a loss is hard for reasons that have little to do with trading. Most of us grew up being marked for being right. In the market, nobody counts how many times you were wrong, and the profit at the end is the only report card that matters. The sizing side of this, how much to risk on each trade so that one loss never hurts much, is in the 2% money management rule.
Further reading
Chapter 2 of 6
How do you let a winner run without giving it all back?
Cutting losses keeps you alive. It does not make you any money on its own, and that is the job of the second idea, which turns out to be harder.
Jesse Livermore's career is told, under the name Larry Livingston, in Edwin Lefevre's 1923 book Reminiscences of a Stock Operator. His most quoted line is about doing nothing: "It never was my thinking that made the big money for me. It always was my sitting." Livermore's own version: "Men who can both be right and sit tight are uncommon."
Do note what the sitting refers to. It means holding a position that is already working. It is easy to misread "sit tight" as permission to wait forever before taking any trade, and that is a different habit altogether. Trading is 99% waiting and 1% action, but the waiting Livermore meant happens after you are in, while the winner does its work.
Nicolas Darvas came at the same idea from a very odd starting point. He was a touring ballroom dancer who taught himself the market and placed his trades by telegram from hotel rooms around the world, watching only price and volume. He built what he called the Box System. A stock trades inside a "box," a range between a recent high and a recent low. While it stays in the box, you wait. When it breaks above the top into a new, higher box, you buy, and a stop-loss trails up behind it, box by box, until the stock finally breaks down. In his words: "I made up my mind to buy high and sell higher." And on the exit: "I decided to let my stop-loss decide."
Richard Dennis was the commodities trader behind the Turtle Traders experiment in 1983. He taught his trend-following rules to a group of complete beginners, the "Turtles," to settle a bet with his partner over whether ordinary people could be turned into profitable traders. His conclusion was about the people more than the rules: "Almost anybody can make up a list of rules that are 80 percent as good as what we taught people. What they couldn't do is give them the confidence to stick to those rules even when things are going bad."
That last line explains why holding a winner is hard. A trend never runs in a straight line. It gives back some of the gain, then some more, and every pullback feels like the moment to grab the profit before it disappears. The fear of giving it back is what makes most people sell early, and Darvas's trailing stop is one answer to it: the stop decides, so you do not have to.
Further reading
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Chapter 3 of 6
Why do they talk more about psychology than about charts?
Read the 9 pages back to back and something odd stands out. Hardly any of the quotes are about an indicator. Most are about the person sitting in front of the chart.
Alexander Elder was a psychiatrist before he became a trader, and he wrote Trading for a Living in 1993. His framework is the 3 Ms: Mind, Method and Money. In his own words: "Every winner needs to master three essential components of trading: a sound individual psychology, a logical trading system and good money management. These essentials are like three legs of a stool. Remove one and the stool will fall, together with the person who sits on it."
Elder also points out that trading is a minus-sum game. Commissions and slippage take a slice of every trade, so the average trader loses a little even before any mistake. That leaves very little room for emotional ones, and he is direct about where they come from: "If you let the market make you feel high or low, you will lose money."
George Soros, the hedge fund manager best known for betting against the British pound in 1992, puts his own success down to the same thing: "I'm only rich because I know when I'm wrong. I basically have survived by recognising my mistakes." His other famous line still holds, and I leaned on it in a 2017 post about Livermore. "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."
He also says something most beginners do not want to hear: "If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring." So, the last trade that felt exciting: was it the one that paid?
So the psychology is the part that decides whether the rules ever get followed, and that is why it keeps showing up. Fear makes you cut a winner early. Greed makes you size up after a lucky streak. Regret makes you chase the move you missed, and relief makes you take a small profit just to feel right. Each of the 9 pages has its own version of this, and the trading psychology guide goes through the most common traps one by one.
Further reading
Chapter 4 of 6
Does Warren Buffett's advice work for traders?
Buffett is the odd one out on this list. He is an investor who buys whole businesses, or pieces of them, and holds for years. Every other name here is a trader.
His best-known tips are still worth a trader's time, as long as you translate them. "Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1." That sounds like Seykota, but it means something different. Buffett is talking about avoiding a permanent loss on a business he misjudged. A stop-loss is a trader's tool for a temporary loss on a price that moved the wrong way.
"Price is what you pay. Value is what you get." This one translates more directly. A trader's version is that the price on the screen tells you what other people will pay today, and your rules tell you whether that price is a trade at all.
The tip that transfers best is his circle of competence: "You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital." For a trader, the circle is the 2 or 3 setups you understand well enough to trade without hesitating. Most trouble starts outside it.
His most quoted line on timing needs the most care: "Be fearful when others are greedy and greedy when others are fearful." For an investor buying a business he has already valued, a panic is a sale. A trader who reads that as "buy every crash" is fighting the trend that Livermore, Darvas and Dennis all told you to follow. The part that does carry over is the warning about crowds. When a trade feels comfortable because everyone you know is in it, that comfort is worth a second look at your stop.
Further reading
Chapter 5 of 6
Where do these traders disagree?
Put the 9 side by side and they do not all agree. In at least 3 places, one trader's best tip is another trader's mistake.
Should you hold a stock that is falling? Buffett: "Our favorite holding period is forever." O'Neil: "If weeds appear, don't hesitate to reach for the trowel." Both are right inside their own game. For an investor who has valued the business, a falling price can mean a cheaper version of the same thing. For a trader reading price, the falling price is the information, and holding it is hoping.
Charts or company reports? Darvas ignored balance sheets entirely: "All a company report and balance sheet can tell you is the past and the present. They cannot tell the future." Buffett built his whole career on reading them. O'Neil sits in the middle, because CAN SLIM screens for strong earnings growth first and then times the purchase off the chart.
Buy the turn, or buy the trend? Paul Tudor Jones: "The very best money is made at the market turns." Dennis and Darvas did the opposite and bought strength after the turn was already done.
So which one is right? Each tip is a part taken out of a working system, and it only works inside that system. Take Buffett's patience, Darvas's breakouts and Tudor Jones's bottom-picking and bolt them into one plan, and you get a plan that argues with itself on every trade. It is a bit like taking driving tips from a rally driver and a taxi driver on the same afternoon. Both are good drivers, and you would still crash trying to do both at once.
The useful question about any quote is whose system it came from, and whether that system looks anything like yours.
Further reading
Chapter 6 of 6
How do you turn a trading quote into a rule you actually follow?
Elder has a line that answers this better than any other quote on the list: "It pays to write down your plan. You need to know exactly under what conditions you will enter and exit a trade."
A quote you agree with changes nothing until it becomes a rule with a number in it. Here is how that works in practice.
- The quote that stings. The useful one is the quote that describes your last bad trade, rather than the one you like the most. If you held a loser for weeks hoping it would come back, it is Seykota or O'Neil.
- An if-then rule. "Cut losses" becomes something you can check: if the price closes beyond my stop level, I exit at the next open, with no second look. Darvas's "let my stop-loss decide" becomes a rule for where the trailing stop moves after each new high.
- A test before a verdict. One trade tells you nothing. A rule needs 100 to 200 trades, written down in a journal, before you can tell whether it works for you.
The 7 ingredients of a trading plan shows where each rule goes, and the trading journal guide shows how to track whether you followed it.
I was lucky to be mentored by veteran traders early in my career. As I wrote in 2017, it is one thing to know you need to cut losses, and another thing to actually cut them when you are wrong.
So, 9 traders and 1 lesson each, and most of those lessons point the same way. Which of these 9 would have saved your last losing trade? Which one do you already break every week? And which one are you going to write down as a rule before Monday?
Further reading
Quick answers
Frequently asked questions
What is the most common trading tip from famous traders?
Cut your losses while they are small. Seykota, O'Neil, Tudor Jones, Livermore, Darvas and Soros all say it in their own words, because a large loss needs a much larger gain to recover. A 50% loss needs a 100% gain to get back to even.
What are Alexander Elder's 3 Ms of trading?
Mind, Method and Money. Mind is your own psychology and the crowd's, Method is your system for picking trades, and Money is how you manage risk so that a losing run cannot end your trading. Elder compares them to the 3 legs of a stool: remove one and it falls.
How does the Darvas box work?
A stock trades inside a "box," a range between a recent high and a recent low. Nicolas Darvas bought when the price broke above the top of the box into a new, higher one, and he used a stop-loss that moved up behind it, box by box, until the stock broke down.
Is Warren Buffett's advice useful for traders?
Partly. Buffett is a long-term investor, so his rules about holding forever do not carry over to trading. His circle of competence does: trade only the few setups you understand well, and know where that circle ends.
About the author
Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.
Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.
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