Speculators are full of instability, insanity, pride and foolishness. They will sell without knowing the motive; they will buy without reason.
Joseph de la Vega, Confusion de Confusiones, 1688
Since Amsterdam merchant Joseph de la Vega’s early observances of the first stock market, the secret to trading stocks has been discipline and risk management. Even in this early market in which all trades were confirmed on a handshake, prudent traders used futures and options to cover their price exposures in the event the market moved against them. Without discipline, traders are more likely to produce volatile returns like the foolish Dutch speculators.