Investing World Today

Review: Trade Your Way to Financial Freedom

January 17th, 2011 Filed under: stock trading systems — Investing Author

The Lowest Price we could find is $34.95 $16.50

The bestselling holy grail of trading information-now brought completely up to date to give traders an edge in the marketplace

Sound trading advice and lots of ideas you can use to develop your own trading methodology.-Jack Schwager, author of Market Wizards and The New Market Wizards

This trading masterpiece has been fully updated to address all the concerns of today’s market environment. With substantial new material, this second edition features Tharp’s new 17-step trading model. Trade Your Way to Financial Freedom also addresses reward to risk multiples, as well as insightful new interviews with top traders, and features updated examples and charts.

Review:

I dont usually like to write any reviews, but I felt compelled to write this for two reasons. The first, is that this book has been the single biggest influence in my trading out of anything I’ve ever read, and I actually bought it because of someone’s review- so if someone reads it because of my review then I would have definitely done them a great service. Second, and more importantly, I really was absolutely disgusted by the many negative reviews written about this book, and I wanted to set the record straight for anyone reading them so that they wouldn’t make the huge mistake of not reading this book. So here goes, but before I start i’d just like to say to those “nay sayers” that Tharp is a trader, and that what makes all of his insight so effective is the fact that he has studied thousands of traders over 15 years and came up with a model for effective trading based on what they all have in common. Then, using a scientific approach, he has quantified this model and given you all you need to know in simple terms. It’s not a bunch of philosophy, but rather priceless insight which we should all be greatful for.

I am indeed calling this the single greatest book ever written on the subject of trading. Why does it deserve such high praise you might ask? To put it simply, this book explains the process of successful trading in such a way as to give u the most incredibly clear understanding possible. There are hundreds of trading books out there, and each one seems to give you the author’s view on what sucessful trading is. The only problem is that so many authors hold the view that it’s all about the methodology and that their methodology is the best or even only way. So u might have heard that you have to have at least a 3 to 1 reward to risk ratio to take a trade. Or u might have heard that you should always scale out to cash in profits, and so on and so on. But what makes this book so unique is that it doesn’t explain trading from a methodology standpoint, but rather gives you the most flexible and open minded explanation out there. It alows u to see, for instance, that a 1 to 2 reward to risk ratio (yes risking 2 just to get 1) could be great in some instances depending on the system. It allows u to stop focusing so much on ur entries and focus on ur exits, which are truly the most important thing. “cut ur losses short, let ur profits run”. U might have heard that before, but now u’ll understand that all it’s talking about is the importance of exits. The book also gives you an unparalleled understanding of what it takes to design your own method, whether it be mechanical or discretionary, and how to track it precisely to see if it will make u money over time. Perhaps more importantly, the exact way it defines the paramters of successful methods gives you a psychological edge that makes it easier for you to trade successfully by default. What I mean by this is that it shows you how to start looking at trading as a long series of trials that will over time make you money because they have a positive expectancy. Do u know how powerful it is just to view trading this way??? It allows you to stop wanting to be right on every trade because you know that while your method will make money over time, each specific trade’s outcome is almost random and unknown. And so u focus on the big picture and find it easier to take losses and not get upset because over a series of many trades u’ll be up. Don’t underestimate the effec this will have on ur trading.

Apart from giving you all of these well defined ways of looking at the basics of trading (things that are all mentioned by the market wizards by the way, but often in vague and seemingly contradictory terms), the book is the single best insight into trading psychology. And here i’m not talking about simple knowing how to be “discipline”. But rather, Tharp shows you in great detail how u need to think about all of ur trading objectives before u start, and how to even align ur trading purpose with ur general life goals.

In the end, the people who rated this book very low are those people that need this book the most. They are out looking for set-ups or for exact formulas on risk, instead of focusing on the foundations of trading success and building things from there. If they dont see the value in this book then I’m pretty sure they’re not very successful because the keys for success in trading- which are no secret- are very precisely outlined in here. In fact, this book has cut down my learning curve by at least a couple of years. Without reading it I would have went off on so many wrong paths because I would have always been confused when seeing seemingly contradictory advice from different authors. That doesnt happen anymore though, because I have such a solid foundation about the essence of trading from this book and can easily tell when an author is simply talking about something which fits him and which I don’t need to apply to be successful. In the end, the key thing you’ll learn from this book is how to truly develope a methodology that fits you and to back it up with all of the other essential things required for long term success.