Trade Your Way to Financial Freedom

by Van K. Tharp

Book Overview

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,...

• Format: Hardcover
• Language: English
• ISBN: 007147871X
• ISBN13: 9780071478717
• Release Date: December 2006
• Publisher: McGraw-Hill Companies
• Length: 512 Pages
• Weight: 1.90 lbs.
• Dimensions: 1.5" x 6.4" x 9.3"

Customer Reviews

Best trading book ever written... hands down

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 w

Why and how to design a successful trading system

Thousands, if not millions, of people waste huge amounts of money and time every year searching for some get-rich-quick Holy Grail of trading. Tharp's somewhat misleadingly titled Trade Your Way to Financial Freedom is definitely not a get-rich-quick technique. Nor is it even a guide to analyzing the markets; there are no fundamental analysis approaches, no technical chart patterns, no quantitative formulae. Instead, Tharp offers something totally different and far more useful: he systematically describes why you should develop your own trading system and how you should go about building and testing it. Description: An expert in trading psychology, Tharp quickly covers why most novice traders fail due to psychological problems trading and unrealistic expectations of the market. He advocates that an individual rationally lay out objectives for trading and design their own system, using whatever techniques work best for them, to meet their goals. Tharp goes on to describe the components of a trading system and how to objectively judge between them. He stresses the importance of money management and position sizing; two areas where traders should spend much of their time but often ignore. Just to be clear, there are no trading techniques at all in this book: no technical analysis signals, no material on how to pick stocks or futures, nothing like that - just how to build a system and overcome some of the psychological barriers to successful trading. Opinion: As a professional commodities trader, I believe that a thorough reading of Tharp's work will give a novice trader the benefit of years of hard-earned wisdom. It can take years of mistakes and losing money before internalizing the lessons Tharp gives out for a relatively extremely cheap price! It is very important to think about position sizing and money management. It is equally important to have a technique that can be objectively evaluated rather than trading randomly. No matter how you choose to approach the markets, whether by reading technical charts, fundamental reports, or quantitative models, Tharp's advice is excellent.

Even with its flaws, it's the best best best

What makes this book so good? It tells you how to build a real trading system. In the process, it exposes the prejudices and assumptions that cause people to lose money. For example: most people think that successful trading is a matter of picking the right stocks. Believe it or not, this belief sets you up to fail. Before reading this book you would probably rank as most important: (1) knowing when to get into the market; followed by (2) knowing when to get out of the market; (3) knowing how many shares or contracts to buy/sell; (4) understanding the psychological factors involved. The book makes a strong case that this ranking is exactly backwards! In other words, when it comes to trading it reverses your entire worldview. (It certainly reversed mine.) Some of these ideas are common, but Tharp tells you *what* and *how* to do. Not on the level of "here's a great trading system," but on the level of "here's how you *make* a trading system", oh and by the way, here's why you *need* to make your own system." That's a huge, huge difference, and other books on the subject are shallow by comparison.The book does have problems. The writing and organization are uneven. Many passages are magnificent, others are cluttered or confused. Tharp is not a very good technical writer; technical details appear to be his weakness in general. Nor is he a good judge of others' writing (the worst parts of the book, especially the gobbledygook on neural networks, were written by other people). All of Tharp's writing that I have read suffers from poor editing. A first-class editor would have turned his first-class material into a first-class book. Instead, what we have is third-rate editing and first-class material yielding a second-rate book. It's a crying shame. However, the book still deserves more than 5 stars. Tharp shines at explaining the key concepts behind successful trading -- and this is the area that matters most -- and at this he is the best.

One of the best trading books I've ever read.

With all of the hoopla surrounding "trading" recently, it's interesting that many, if not most, would be traders don't know how to get started. I should know. I'm a professional, full time trader and I'm constantly being asked,"John, how can I daytrade and make a living?" After reading Van Tharp's new book, I finally have a great answer to that question.Sometimes I think I've read almost everything published on trading. Some are so basic they insult the reader, in their naïveté. Others are very advanced technical treatises. Van Tharp's book is refreshing. I found it a great read...a blend of the foundational concepts such as "fundamental analysis" with very advanced concepts including "expectancy"...a topic that very few traders understand at all. Along the way, Tharp gets the reader involved by asking plenty of self-analysis type questions. Questions designed to immerse the reader in the complete process of trading. From understanding biases and success roadblocks...to designing and implementing a winning system...it's all here.Whether you're brand new to trading, or a seasoned pro...there's plenty of material to dig into here. A lot of meat...very little fluff. I rate it five starts. Get it. Read it. Understand it. And best of SKILL in your trading!

Groundbreaking Research in Layman's Terms

Dr. Van Tharp's excellent book "Trade Your Way to Financial Freedom" is truly a work of groundbreaking proportions. It is the single most important book I have ever read on the subject of trading sucessfully. Using a very organized and readable format, Dr. Tharp leads the reader step by step through the maze of myths about trading and arrives at the true meaning of the Holy Grail -- that the secret of success is inside you. Dr. Tharp serves as your personal guide, taking you safely through the treacherous terriroty surrounding information about trading systems. In the end we are much wiser for the experience, arriving at our destination stronger for having completed the journey. In short, we gain the wisdom that comes with knowing one's Self and become very clear on what works...and what doesn't. By interviewing thousands of successful traders during a 15 year period, Dr. Tharp was able to find out what was common in their individual systems of success. He then created a "model" of those variables, arriving at these basic truths: Low risk ideas combined with appropriate exit strategies and position sizing create the foundation for developing successful trading systems. Dr. Tharp shares his research with the reader, supporting his conclusions with rich examples. After finishing Tharp's book, even a layman has the tools to design a highly profitable trading system that contains all the strengths common to the best trading systems but also "fits" that particular trader's personality. This book transformed my experience of trading and allowed me to trade with the confidence that comes from knowing the truth about what works. Since implementing Dr. Tharp's strategies to my trading style, the results I have experienced are nothing short of miraculous. Quite frankly this is the first and last book you will ever need if you are serious about trading (or investing) your way to financial freedom. If you want to develop a highly profitable, low risk trading system that produces consistently strong returns, then read this book! All you need is an open mind and the courage to put some of Dr. Tharp's innovative research to the test. I promise you, if you read this book and apply Dr. Tharp's proven concepts, your trading will immediately improve and your bottom line will stay in the black. Without a doubt, Dr. Tharp's book is the best "investment" I have ever made. My return on this "position" is incalculable...