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.

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.

Helped me understand position sizing how to do expatancy on my returns over times based on what Im risking book is worth its weight in gold. thank you Doc!

450 pages that you will need to read three to four times if you really want to master the material, and it is worth mastering if you want to be in the game for the long run. If you are a gunslinger this is not your book. The book is on how to build a reasonable to good return over many years, with an awful lot of material on blow up protection plans, which is very good. The book does not offer any specific trading set ups, and as the author states, "the book is only very general". If you want to learn how to set up a trading system in your mind, this is a great book, if you want to rid yourself of a few pesky trading monsters in your brain it can help there too, it has a very good thought provoking questionaire for that. All in all I would say this book will help serve as a foundation of a trading plan for me.

This book at the very least introduces all that you can need to be a successful trader. I can see the beginner scoffing at the examples and many pages of pretty much tearing the "common wisdom" apart but what the author says is true. I have been trading for many years and survived in this area so far and multiple times I just nodded along as I read the pages. I wish I had read this book earlier. It can't cover everything in depth, so it is definitely a jumping board type of book. Do the work, do the trading, and try to see elements of what the author talks about in your trading life and you should be coming out ahead. Also I do think the most important bits are covered in his q&a at the end, and the ending of the book, but you should not rush there if you are a beginner. Do spend some time upfront to familiarize with the concepts first. All in all, excellent book

I found the book somewhat useful in that it exposes you to a lot of concepts. I found it to be directed toward someone who wants to develop a system to become at least a part-time day-trader, not someone looking to improve their general investing knowledge. It was pretty focused on volume trading concepts and statistical risk management concepts. I found the ideas in the book generally good, but the book is poorly written in my opinion and at times not easy to read. The organization, grammar, etc. is fine, but the examples are not always clear. The charts often have axis data that is unreadable (even with a magnifying glass) so it's hard to tell what the text is describing, and many of the examples seem to either pull some information out of the air, or assume some general knowledge that isn't presented. I am an engineer, so I understand the math with no problem. It was disappointing that there are virtually no formulas; it was like a constant word problem described in text--sometimes with a missing (maybe assumed?) piece of needed information which I found to be very confusing and frustrating to figure out what the author is describing. I got the general ideas though, but it was definitely not what I would consider an easy read. The content seems to be directed somewhere between a beginner and advanced investor, but probably not particularly useful for either one alone. If you have a good general understanding of investing and want additional exposure to risk management and short-term trading concepts and risk management, then this is probably a good resource for you if you're willing to spend the time and effort to plod through the book. However, if you are very new to investing or trading this probably is not a good book for you. If you have at least some of the basics and want to expand your knowledge, it will expose you a lot of things to consider and do further research on.

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.