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.

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.

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.

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.

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

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...

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

This book is very good if like me your very new to investing and sharedealing and would like a detailed overview of trading in the money markets. it has some inciteful tips and has sections written by various guest experts in the different types and area's of the trading world. as a beginner i would highly reccomend it.

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

Iedereen die begint met traden zou dit boek moeten lezen.

A must read

I'm your average Joe trader, manage some of my investments (dabble more like it). Dabbling in the recent run up in cryptocurrencies is what drove a friend to recommend this book to me. I've never written a book review but felt compelled to do so, not to rave on this book, but as "warning" to how to get the most out of it before giving up.PROS:The last third of the book is where it shines for novices. Most who have been around for a while will know there is market and your own psychology behind prices, various entry strategies out there, the standard stuff you nod your head at. The book's value shines through in covering stop-loss, how to take profit, and how to position size. These concepts have actual technical methods and the book covers it at a semi-approachable 12th grade reading level.The book also shines in that it gives you some perspective about how to look at trading in general. The "snowball fight" analogy is very good, you're trying to accumulate earnings while accepting that there will be losses. However over the course of hundreds/thousands of trades, they need to average out to where you're accumulating, net.CONS:This is why I'm writing this review. Put frankly, the writing/literature/style of this book is horrendous. It's harder to read than a college textbook, even for simple concepts. The editors did a very very poor job of editing for style, clarity in the text, and even clarity in the pictures. It's obvious this book was written in the 1990s, most examples are not relevant anymore (tens of pages on impact of transaction costs. Who still trades over the phone?), and even the pictures are not clearly labeled (you literally need a magnifying glass to see the numbers on chart scales that the author constantly references). I've wanted to throw away the book about every 5 pages because I have to re-read sections multiple times just to make sure a pronoun the author uses is what I think it means. This is simply unacceptable. I'm constantly thinking: there must be another book on amazon that covers similar topics, but written differently. All suggestions are welcome!The last con is that some of the most important topics (stop loss, exits, position sizing) don't go into much detail. The author does a good job citing previous research and his primary sources, but I feel 1/4 of the book has irrevelant fluff that could be replaced with deeper depth about the important stuff.HOW TO GET THE MOST OUT OF IT:The author at the very end suggests readers read the book 4-5 times so the concepts become second nature. I agree 100% with this, because the concepts go against your natural inclination. However because of the crap writing, the average Joe trader needs to read it an extra 3-5 times just to make sure he understood what he was reading.Read this book with investopedia at your side, and you will change the way you look at "trading". Investing? Less helpful. More than 1 trade per month? Definitely buy and read 10x in the next year, it will change your life.

Todo trader principiante o avanzado debería leerlo, obligado!Really amazing!