Trade Your Way to Financial Freedom

I used the screen reader feature on the iPhone in order to listen to this book. The information provided here very educational and effective. I really like the R system they use to evaluate your trading strategies. R is for risk, and the most important part is to always build your systems by considering the risk of each trade. The other thing is treating all of your trades in terms of the risk factor. 4 trade I closed in the past 2 days were 8.2R, 2.6R, 1.2R and 2.1R - this really shows how good or bad I’m doing in real time. The other beauty of the book is his advice on position sizing. These are very important if you want to preserve your capital. I love his “marble game” that teaches you how much capital to risk in each trade. I wish I had this book earlier, I probably would have done much better in my trading career!

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.

When he says in Chapter 12 of this book that "...money mangement is the most important aspect of system development, other than pysychology..." Tharp is absolutely correct. His distinction between what is money management and what is an exit strategy, where his belief that exits are not a part of money management, is off the mark. Exits are completely tied in with how your money is managed throughout your trade. Whether you are using trailing stops, or scalling out of a position - your money is being managed by how you select and design your exit strategy. Certainly - an entry point is not a money management decision - but how one determines how much to exit and when to exit is. The first edition of Tharp's book came out in 1998, and is certainly a classic and deserves credit for opening many traders eyes to the importance of money management. Two other classics worth looking at with regard to this topic are Nauzer Balsara's Money Management Strategies for Futures Traders (Wiley Finance) and Ralph Vince's The Handbook of Portfolio Mathematics: Formulas for Optimal Allocation & Leverage Balsara and Vince are the "grand daddys" of money managemant, and are essential reading. Another more recent book that is written in an easy to understand style is Bennett McDowell's A Trader's Money Management System: How to Ensure Profit and Avoid the Risk of Ruin (Wiley Trading) . Money management is crucial to any traders succes and developing a solid foundation of knowledge in this area will assist even the average trader in generating greater profits.

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

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

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