Shop now Shop now Shop now  Up to 50% Off Fashion  Shop all Amazon Fashion Cloud Drive Photos Shop now Learn More Shop now Shop now Shop Fire Shop Kindle Listen in Prime Shop now Shop now

Customer Reviews

4.4 out of 5 stars25
4.4 out of 5 stars
Format: Hardcover|Change
Price:£25.34+ Free shipping with Amazon Prime
Your rating(Clear)Rate this item

There was a problem filtering reviews right now. Please try again later.

on 25 August 2007
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.
66 comments|139 people found this helpful. Was this review helpful to you?YesNoReport abuse
on 13 December 2009
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.
0Comment|2 people found this helpful. Was this review helpful to you?YesNoReport abuse
on 17 February 2014
Well worth a read. The book may have originally been written in 1998 but the lessons are timeless. Tharp outlines how trading is 100% psychology which is why a trader's behaviour is so critical. He includes interesting interviews with successful traders to back up his conclusions. He underlines the importance of self discipline and paying attention to critical 'internal control' factors such as risk and position sizing, exit strategies, the effect of compound interest, trading costs etc etc etc. Whilst much of this may appear like a common sense approach to trading, Tharp spends useful time in the book outlining important tasks such as setting objectives, finding a trading system that suits and of course trading ones own beliefs
0Comment|One person found this helpful. Was this review helpful to you?YesNoReport abuse
on 29 July 2012
Well..everything has been said by the other users! Van Tharp gives you all the building blocks you need to construct your own profitable trading system. It's not only great for the more pro traders among us, but also a fantastic book for beginners to start with since Van Tharp writes in a clear and understandable way. I started with Tharps book and moved on to some of the other books he recommends. I also like the fact that he does not promote his other books too much and even admits there is not very much new insights in his other books except some 100 pages in supertrader about how to set up a businessplan for your trading. I love trading and i do this for a hobby. I am however at the point where my monthly profits consitantly equal my monthly income from my regular dayjob as a management consultant. I highly recommend this book and also the Jack Schwaggers and especially John Sweeny's book about campaign trading and Lars Tvede's book about 'the psychology of finance'. I would not read to many different books about trading tough. I would instead focus on a few specific reads ( say about 10?)that give you good insights into a strategy and system that could suit you. Read those books over and over until you understand all the concepts explained! I for example do price action trading and focus only on Al Brooks series about price action trading. I live in the Netherlands and i am always amazed by delivery rates and speed! Keep up the good work amazon!
0Comment|Was this review helpful to you?YesNoReport abuse
on 17 November 2009
'Trade Your Way to Financial Fredom' explores key components of effective trade strategies and sensible portfolio management techniques. Van K Tharp explains why market entry strategies are only valid when combined with compatible decision making skills that must be employed correctly once the trade is in progress. The book covers the psychological challenges that traders face, how traders should evaluate their trades' performance, the setting of stops and position sizing. The approach is thought provoking and it certainly helped me improve my knowledge of risk and reward in the context of trading. With nearly 500 pages that cover a wide range of relevant topics; each chapter finishes with a short set of useful notes to help understanding and make the book a useful reference. This has helped me to take a far more businesslike approach to my trading. Although a little 'heavy going' in places, I think that most readers that want to take trading seriously would find it useful.
0Comment|Was this review helpful to you?YesNoReport abuse
on 18 September 2013
I was fortunate enough to pick this book at a Charity Shop when on holiday for £2.25! I was attracted to it because the author is referenced in 'Market Wizards', and as any market watcher will know those books are essential material for anyone wishing to enter the shark infested waters of the markets. The book is an excellent approach to your systems and what you should consider. It gives lots of food for thought, but leaves you with the thought that only you and your edge is what matters when searching for your Alpha. I would recommend this book as one for those not quite at beginner level but someone who wants to ensure all their bases are covered so to speak when they trade. A solid 4 out of 5.
0Comment|Was this review helpful to you?YesNoReport abuse
on 1 November 2012
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.
0Comment|Was this review helpful to you?YesNoReport abuse
on 28 February 2010
So you want to be a financial markets trader? Do you realise that 90% of spreadbetters loose thier money in the first 3 months? This book doesn't give all the answers but it tells the truth about many things, debunks a few myths that vested interests will have you believe and explains how to be a success as an active investor / trader.
In Van Tharp's eye's the key to success as an investor is money management. And after 20 years trying to reach the holy grail of the title I'd have to agree.
This book was recommended to me by Tom Hougaard, someone who has acheived the goal of the title. (Google him)
One thing I would highlight is that the book gives examples of trading systems one might use but it does not give you a system. Other books will try to sell you that.
So in summary, this book doesn't give all the answers but it tells you all the questions and tells you many of the answers. I'd rate this as a top 5 traders book, if not top of the list.
And bearing in mind one bad trade will cost you 10 times the price I'd thoroughly recommend it.
0Comment|3 people found this helpful. Was this review helpful to you?YesNoReport abuse
on 12 February 2013
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...
0Comment|Was this review helpful to you?YesNoReport abuse
on 16 February 2013
I liked this book a lot. I am generally a long-term investor, where I am making money but slowly. I have tried trading a couple of times, and failed. Now I can see why. Now I just need to design a system...
0Comment|Was this review helpful to you?YesNoReport abuse

Sponsored Links

  (What is this?)