Trade Your Way to Financial Freedom (BUSINESS BOOKS)

Having learned a lot over the past couple of years trading this book is always where I'd recommend anyone to start reading. The author really drums-in a strong risk management process which is crucial if you don't want to 'blow your account up'. Even if the trading methodologies aren't your bag, the risk management process will be crucial if you want to be successful.

Absolutely love this book. It has been central to my trading plan. A must have for all traders.

Decent read, covers alot of the basics, nice to see money mangement stressed. Trends, breakouts, band trades covered in some detail and tested in book. The Best information in this book is about money management and expectency of trading systems. Plugs his websites and other books which is mildly annoying, but the suggested reading list of other authers is pretty good. The way Van k Tharp writes and talks is very easy to understand and digest. The information in this book is overall good if its one of the first few books you have read on the subject of trading.

In my view, if you are thinking of trading the markets, you should read this. If you are already trading the markets, you should read this, and if you have already read this, you should read this again. It's full of the good stuff...

What this book discusses are futures and other highly leveraged financial products which are sum-zero games. This means that if you make a profit then someone, somewhere, makes a loss. It also means that the longer you play the game the more likely you are to run into a prolonged losing streak with serious financial consequences. To be able to stay in the game your trading strategy needs to be superior to the majority of other traders who are also playing. Many are professionals with access to considerable computing power and the ability to constantly analyse in depth such factors as entry and exit points and profit expectancy. The expertise of the other players means that the man in the street is likely to enter these markets with both hands tied behind his back and discover it is a very easy way to lose money! Even the author of this book, Van Tharp, doesn't demonstrate that he is a successful trader. Consequently, it is not surprising there is no evidence that the ideas he puts forward actually currently work over a meaningful time scale. It is obvious that Van Tharp has researched the subject in depth and this is impressively reflected in the book which makes for interesting reading. However, it is important to realise that this book primarily reviews the work of others rather than calls on his own personal experience. One of the major drawbacks of that is trading strategies which have been successful in the past cease to be so once they are in the public domain and simply to repeat them is rarely a recipe for success. This is particularly true of the trend following techniques he advises. To have any hope of achieving what the title of this book suggests depends on two ingredients. The first which is essential is the ability to select stocks that are more likely than not to move in your favour. It is here that the book is especially weak. More of that in a moment. The second which is highly desirable is to bet on these stocks in such a way as to maximise profit but at the same time to minimise risk. This second ingredient is bound up in what is known as position sizing which is a rabbit which Van Tharp pulls out of the hat with a great deal of panache. Clearly, from the number of 5 star ratings this book has achieved, both in the UK and US, readers are impressed and reflects how easily Van Tharp has been able to convince people who have little or no understanding or experience of these markets and who are not in a position to evaluate this book objectively. What Van Tharp says about position sizing is fundamentally correct. However, it is important to realise that to work out the figures you must have a history of profitable trading. If you don't then this book will be of little practical help to you. Nor will it help you to make your trading profitable. If, however, you are already trading successfully then this book deals with the subject of position sizing at too superficial a level to be particularly useful. You will also need to look elsewhere. Van Tharp directs the reader to his own website, for which this book acts largely as a platform, where further information is available at significant cost. An alternative is the bibliography which is a little goldmine! As far as the most important aspect of trading is concerned, that of stock selection, Van Tharp suggests it isn't possible to forecast how stocks will move and consequently it is largely pointless to try. He therefore attaches minimal importance to stock evaluation and selection. His advocates keeping control of a portfolio by using trend following techniques and stop losses which are well known strategies that weed out the losers while allowing the winners to advance. By their nature they produce a large number of small losses and a few large gains. In the right hands they can be sensible strategies but Van Tharp implies they are inherently capable of achieving a profit. Basically, all you have to do is to use any one of a variety of stock selection strategies, which one is not especially relevant, apply to it the stop loss principles and also the appropriate position sizing and maximise the profits. Wonderful - a free lunch. If only it was that easy! Van Tharp gives examples of how position sizing affects profits. The models were back-tested using a trading strategy that involved breakouts and stop losses. The strategy was employed very successfully by a group of traders in the 1970's. His best model demonstrates a compound annualised profit of 23%. This appears to be attractive until you apply the strategy to different time frames and to different markets and realise that it is now just as likely to produce similar losses. Position sizing techniques haven't stopped working. What has happened is whereas in the past the strategy selected stocks that were more likely to advance than not, now it doesn't. Too many people are on the bandwagon and have eroded away the advantage. The simple fact is it is impossible to trade these markets successfully without stock selection expertise, irrespective of how good the position sizing strategy might be. Position sizing, itself, will not produce profits. All it can do is to maximise an already profitable trading strategy. The bottom line is that this, in turn, depends on being able to select stocks that are more than likely to perform in your favour. There is no free lunch! The question of selection and bet size are comprehensively and authoritatively dealt with in the book "Commonsense Betting" by Dick Mitchell. Although written for the race-goer, the principles are the same and clearly explained by someone who, unlike Van Tharp, speaks from practical experience and success.

seen the whole new perspective about stock trading. the best trading system book you will ever have. recommended forr all beginners.

This is one of the very few investment books which at least tries to give some concrete holistic advise to an aspiring trader. Not just the ordinary self praise as mostly in this kind of investment books by self proclaimed super traders.

Fantastic book for both beginners and experienced traders. Definitly recommend, and a essencial book to have amongst the collection of trading books.

Excelente livro! Muito bom para quem busca obter perfil de retorno mais consistente.

I'm of the opinion that reviews on stock trading books depend more on degree on the experience and outlook of the reviewer more than the book. At times this makes it difficult to figure whether a book is going to be relevant to me. So I'll describe myself a bit. I have been investing in stocks for many years using the stock picks from one or two good sources. It's been a way to build retirement income in my spare time. I've been moderately successful, but nothing to brag about. In the past few years I've been gradually becoming more active in trading, making many trades a month and recently many per week. I'm considering trading as a living or at least a part-time income. I've studied fundamental and technical analysis through literature, webs sites, some books, newsletters, and my broker's courses, though I don't pretend to be even close to being any sort of expert. Tharp's book is the first time I've seen what I would consider a fundamental "text book" on trading. It's not a book on how to pick stocks or entry points though the subjects are discussed in the context of an overall system. Tharp has created a paradigm shift in my thinking. He walks you through all the elements of a successful trading system, including how to define and measure one and how to think about trading. He asks questions and gives practical examples so you get the ideas and the importance of the issues. He's careful to work through examples and explain himself better than any financial book I've read so far, though he does not explain some technical analysis terms. But they aren't necessary to getting the value of the book (and give you some good topics for your own research). I've been at it long enough to realize that he's pretty thorough in the issues he wants you to consider. He also dispels commonly accepted thinking that leads to poor performance (read "loosing money"). If you are looking for fast answers, a get rich scheme, or an algorithm that will tell you how to find winners, what to buy and when to buy it, then you will probably be disappointed - but in fact you may need the book more than you realize. I wish I had read this book years ago. It would have corrected my understandings of what investment trading is all about and how to go about it. I particularly appreciated the detailed explanations of risk verses reward and position sizing. I have heard "risk vs reward" talked about in many places, but never had it explained in a way that I could use it. His examples may seem belabored to some, but they helped cement the concepts into my mind. I found Tharp's personable style and stories made the book easy to read and helpful. If you have been trading for years and are comfortable with it and make money, then you may not gain much from the book. To everyone else I recommend it.

Hold or fold is often a very difficult question to answer to when you are in a trade and this will help you to build up a methodology to evaluate your trade and conclude if yes or no, you should keep your trade. This book also covers greatly how to write down a trading plan. You hear everywhere that you should have a plan but I never found proper guidelines before this book. However, the author claims many times in the book that entry is not important. I can't disagree more. The entry quality will enables you to have tight stops and thus big positions which will thus open yourself to very good profits. The author often speaks about the possibility of having 25R (25 units return for 1 unit of risk). I agree it is possible but if you would have entered at 50% retracement of your initial entry with the same stop level you would got a 50R return. This is why I think that the author completely miss one huge element in trading

Iedereen die begint met traden zou dit boek moeten lezen.

A must read