Matthew Chandler 17 / May / 22

Here is a list of famous financial proverbs that I find very relevant.

Best financial proverbs


This proverb was originally intended for armies, but it applies perfectly to the world of trade. Many people come to the financial markets with the goal of getting rich and making a fortune in the shortest possible time. They then use high leverage to earn faster and always end up debiting their trading account.

Here is another financial saying of the same genre. Trading can make you make money, but first you have to go through a long learning curve and gain experience. It takes several years to become a good trader and hope to make money.

Risk management

There are two basic rules to follow in the stock market. The first is not to lose, the second is to never forget the first. (Warren Buffett)

Risk management (wealth management) is an important element in the success of a trade. You won't be able to make money in the long run if you don't protect your capital. In trading, your money is your trading instrument. If you lose it, you will no longer be able to work. Before you think about making money, think about how not to lose it! Place stop losses on all your positions and never risk too much capital on a single trade.

If you no longer believe in your scenario, cut your position, don't wait for the market miracle. The market will never give you a gift (or very rarely). You must know how to quickly cut your losses. The problem is that many novice traders do not want to lose. Accepting this is the first step to winning in trading. Losing trades are part of trading. Always use a stop loss and never move it (unless you are in profit).

The active investor must understand this principle: he must learn to remain inactive (Honoré de Balzac)

This is one of the financial proverbs that you should never forget. In trading, you must learn to be patient and not want to be in a position all the time. Not being in a position is already taking a position! You should only open a position if your trading strategy tells you to, and NEVER make an exception. In finance, one mistake can be enough to undo weeks/months of effort. It is better to be out of the market than in it with losses.

If I got rich, it's because I let others make money after me (Baron Rothschild)

An excellent trading lesson from a famous banker. Obviously, this means that you cannot sell high and buy low. You need to be able not to be too greedy, not to pull too hard on the rope, not to succumb to euphoria.

This is a financial saying that we often hear when we talk about global stock markets. When financial markets are in a state of euphoria, a bubble forms. Bubbles always end up bursting, the only thing we don't know is when... Financial markets follow cycles, that's a fact. Financial stocks can't rise forever. Remember this, the faster the rise, the harder the fall.

Most people are interested in stocks when everyone else is interested. Time to buy when no one wants to buy. You can only buy what is popular. (Warren Buffett)

Once the media starts talking about the name, it's too late. An example is gold. The last 6 times the Wall Street Journal appeared in the headlines about it's time to buy gold, in the 6 months since the price fell. You should not buy when the market is very bullish (too much of the advance has already been made), but when the markets are bearish. This is where we find the best opportunities in the stock market, where we can buy undervalued securities.

Real madness is doing the same thing over and over and expecting a different result

This financial saying should be sent to all new traders. Most of them never doubt themselves when they destroy a trading account. They often tell themselves that they are just unlucky. No, luck has nothing to do with it, if you shaved off your account, you made mistakes. If you do not doubt yourself, if you do not strive to learn from your mistakes, there is no point in re-depositing funds, you will still lose your money.

"Our goal is to find unusual companies at regular prices, not ordinary companies at unusual prices." Warren Buffett

This is the golden rule of investing in the stock market. Most people make the mistake of focusing only on price, but what creates value, what makes your deal a winning one in the long run, is the business. It should have a solid foundation and have very good growth prospects. This is what creates value. These are the companies that will see their stock prices rise and the rest will only pick up crumbs in a bull market.

Investors often tend to buy companies that have failed in the stock market. If the price of a security continues to fall, there is a reason that the company is not in good financial health and does not have good growth prospects. Playing against the trend is like pissing against the wind.

In short, beware of consensus. The consensus is always wrong, while the fundamentals are always right. Once all economists or analysts agree, the market will do the opposite. The recent all-announced EUR/USD parity case is a great example. I'll end with a little joke that I thought was very funny: why were economists created? So that not only meteorologists are not mistaken

If you know of any others you like, please share them!

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Matthew Chandler
Matthew Chandler
Matthew Chandler 33 years old Born in Edinburgh. Married with one child. Graduate University of Cambridge, Psychology course 2011. Works at Acclaim Studios London.

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