Legendary traders may have different trading mindsets, use different systems and different entry rules, but there are 3 immutable principles that all legendary traders have. are applied to earn huge wealth in the market.


The overview of the above 3 articles are 3 immutable principles for legendary traders to be very successful in their market speculation. Those 3 principles include:

1. Stop losses quickly when the trading idea goes wrong and keep your losses small

2. Respect the price movement of the market; follow the market trend

3. Compromise. Your winnings should be large enough to cover your losses and make a profit


Many traders believe that legendary traders have the ability to predict the market, that is, they predict whether the market will rise or fall from there to be able to make large profits. But the truth is quite the opposite:

Martin Weig says, “Finding out that investors who rely on oracles often fail miserably.”

George Soros: “Success in speculation is the exact opposite of my ability to predict the future…in the financial markets. The forecast results are much worse than you think.”


Larry Hite: “… investment strategy should never depend on predicting the future. When you start to believe that you have the ability to predict the future, you are in trouble. Never forget that no one can predict the future.”

Thus we can draw the conclusion that the above 3 principles - stop loss; respect price action; and make a profit - these are the things that make all legendary traders successful. Every legendary trader may use different systems and trading signals, and their order management may be different, but they always follow these 3 immutable principles.

Excerpted from Bruce Babcock's book The Cardinal Principles of Trading, published in 1996:

“You can sum up successful trading in four principles: (1) trend trading; (2) fast stop loss; (3) long profits, and (4) risk management. Any successful trading strategy should be based on some or all of these principles.”

“Note that learning how to predict the market is not a rule of thumb. I have good news for you: the market is unpredictable.”

Besides the above principles, there is one factor that is always mentioned by legendary traders in sharing about how they succeed in the market - that is controlling emotions. In the next article, we will see how they control their emotions.

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