1)"If the unusual never happened, there would be no difference in people, and then there wouldn't be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It's the guessing that develops a man's brainpower."

As much as we try to use scientific approaches to improve the odds, trading is still a guessing game. The more you guess and study your successes and misses, the more you improve your ability to guess accurately.

2) "I owe my early success as a trader … not to brains or knowledge, because my mind was untrained, and my ignorance was colossal. The game taught me the game. And it didn't spare the rod while teaching."

The notion that "the game taught me the game" is key. There is no better way to learn to become a speculator than to jump in and do it. Make mistakes and learn from them. There is no shortcut. The game will teach you the game.

3) "You can't tell till you bet."

This is one of my favorite adages. It's one thing to say you like a stock, but you won't know for sure how it's acting until you own it and feel the emotions of seeing your idea play out in dollars and cents. Using play money is a worthless activity. If you want to learn to speculate, you must put money on the line.

4) "It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side."

Keep a running diary of all your successes and mistakes, and look over the entries from time to time. Experienced traders keep books full of their past trades neatly organized and annotated so that they can burn into their mind what reliably works and doesn't work.

5) "When a man is right, he wants to get all that is coming to him for being right."

There is nothing worse than having the right idea and only making peanuts on it. You need to bet big on your best ideas, especially after they start to work. We typically do that by adding options for leverage. Options offer a higher risk-reward play, so we can supercharge our stock picks by adding options after we've seen that the stock is moving well in the expected direction.

6) "They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market. Where I should have made twenty thousand dollars I made two thousand. That was what my conservatism did for me."

Once you have conviction about a trade, don't exit just as soon as you have a profit. Let the idea play out, taking small profits along the way as you regularly lift your target price.

7) "After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine -- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance."

Don't be too anxious to exit a winning trade in a well-established bull or bear cycle. Sit tight through minor corrections and let the full sweep of your idea bring you the maximum possible profit. Be patient with an idea that's working as you expect.

8) "One of the most helpful things that anybody can learn is to give up trying to catch the last eighth -- or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent."

Once you have determined that you want to buy or short a stock, don't get too cheap on the limit price for entry. You want to be sure you can establish a position so you don't miss out on a great trade. And once you've decided that it's time to exit, don't get too greedy on the limit price for profit. You can miss a large profit while waiting for an "ideal" exit price.

9) "The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street, even among the professionals."

If you don't see a high-probability trade on a stock that's moving sideways, don't force it. The decision to not trade is often more valuable than the decision to trade. Learn to master the art of inactivity.

10) "People don't seem to grasp easily the fundamentals of stock trading. When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stock on a scale down, I buy on a scale up."

Buying down to improve the price of a position is great if you have a high level of conviction and a lot of time. But for most people, buying as the stock is on a move upward, instead of buying at a low, is wiser because the rising price is proof that you have the right idea.

11) "Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit. Wait and watch."

The best growth stocks are always the most expensive. During a bull cycle, you have to buy stocks with the richest P/Es near highs (on pullbacks) because they are the most popular and feature the most momentum. Likewise, shorting new lows in a bear market is the way to go -- the ones that have fallen the most are often the ones that still have further to go. 

12) "Prices, like everything else, move along the line of least resistance. They will do whatever comes easiest."

Strongly up-trending stocks in a bull cycle are most likely to keep going. Determine the line of least resistance and align yourself with that movement.

13) "I was utterly free of speculative prejudices. The bear side doesn't appeal to me any more than the bull side, or vice versa. My one steadfast prejudice is against being wrong."

It's best not to think of yourself as a bull or as a bear, but as an opportunist -- ready to take advantage of uptrends and downtrends in equal measure as the fundamentals and technicals dictate.

14) "The hope of making the stock market pay your bill is one of the most prolific sources of loss in Wall Street. … There isn't a man in Wall Street who has not lost money trying to make the market pay for an automobile or a bracelet or a motor boat or a painting. I could build a huge hospital with the birthday presents that the tight-fisted stock market has refused to pay for. In fact, of all hoodoos in Wall Street, I think the resolve to induce the stock market to act as a fairy godmother is the busiest and the most persistent."

The market is not an ATM, ready to spit out bills at the press of a button. You cannot approach it as a way to buy a new car or pay for a vacation. You need to exercise a methodical, workmanlike, persistent, professional approach, and keep your needs and desires out of your head, because they will lead you to make bad choices.