Average Reviews:
(More customer reviews)This book is excellent for traders that are ready for it. You need a foundation in trading to understand its importance and take the principles seriously. Once you are through the rainbow and butterfly phase of trading and realize that you will not be a millionaire in a year this book will help you get focused and get serious about your trading and what really works.
Here are the six universal principles of successful traders:
1). Preparation
Author Brent Penfold is in the minority believing risk management is the #1 priority in trading. He believes that once you get your trading system and position size in place you must use the amount you will risk on each trade to figure out your risk of ruin. The book shows specifically how to figure this out using an excel spreadsheet. His point is that if your risk of ruin is not zero then you will eventually blow out your account. Risking 1% to 2% of your capital in any one trade usually gives you a zero percent risk of ruin but it also depends on your systems win/loss ratio. But the point is to test any system with 30 trades first then determine your risk of ruin.
2). Enlightenment
Your #1 goal is to lower your risk ruin to zero. In trading the trader with the best ability to cut losses short wins. Simple trading strategies work the best based on support and resistance. The simplest way to win in trading is to trade with the trend on either retracements of break outs. The 10% of winners in the market win by treading where others fear, buying on break outs when they first occur and going short when a new low is made. Or buying into the abyss when a security finds support or resistance and reverses at the end of a monster trend.
3). Developing a trading style
You must choose your own personal style of trading, swing trading or trend trading. You must also trade based on your chosen time frame: intraday, short term, medium term, or long term.
4). Selecting Markets
Ideal markets to trade have volume and price transparency, liquidity, 24 hour coverage, zero counter party risk, have low transaction costs, and are honest and efficient. They also need to have the good trading attributes of volatility, research, simplicity, ease of short selling, specialization, opportunities, growth, and leverage. These are the markets you can make money trading.
5). The Three pillars of trading.
Money Management: You must make your trades as fixed as possible. Trade with the same risk, capital, units, percentage, and in the same type markets to manage risk most effectively.
Method: Choose a method that works for you and your personality from the ones available. (Dow Theory, technical indicators, patterns, price and volume, etc,. etc.) Once you have a methodology to your trading test it 30 times by e-mailing a trading partner for accountability to verify it works in the real world.
Psychology: Manage your hope, greed, fear, and pain to stay in the game.
6). Putting it all together
Monitor performance. Positive reinforcement. Equity momentum.
I have been actively and successfully trading the market for a decade and agree 100% with the authors principles.I have also learned a lot from this book even though I have read over 100 books on trading at this point.
The author finishes up his book by asking many legendary traders and some that are successful private traders what one advice they would give to aspiring traders. This advice alone is worth the price of the book. Here is a summary:
Money Management:
Trade small
Focus on risk.
Methodology:
Pick a method that suits your personality.
Develop a simple methodology.
Avoid the majority, learn to anticipate reversals.
Look for alignment in set ups.
Good defense wins games.
Identify low risk set ups.
Know your methodology using software.
Psychology:
Deep practice before trading
Expect to lose. Trade to win.
Be disciplined. Be patient.
Be humble.
Be in control.
This book is the real deal. The author warns of the pain of trading. If you trade you will experience those ten losing trades in a row in any system. You will experience the 10% draw down in your account the only question is when. 90% of people who enter the markets to trade will lose. The majority of even successful traders who win in the markets usually start out by losing most of the money in their first trading account. So be warned the market uses maximum adversity at all times so the majority of traders lose long term. This book is in the top five I have ever read on trading and is a must for any serious trader's library. Even with the long review I have not even scratched the surface of this excellent book full of trading wisdom. It is like combining all the best trading books into one. I would give this book six stars if Amazon would let me.
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The Universal Principles of Successful Trading clearly and unambiguously articulates trading principles that distinguish the winners from the losers. Though trading can be performed in different markets, across different timeframes, and with different instruments based upon different techniques, there is one common thread that ties all winning traders together: the universal principles of successful trading. All consistently profitable traders adhere to them regardless of the markets, timeframes, and techniques.
In this ground-breaking book from top trader, Brent Penfold, the reader will:
Learn how to develop a trading plan
Learn how to identify and create an effective methodology
Discover successful money management strategies
Understand trader psychology
And many more exciting trading and strategies secrets.
Supporting the universal principles are rare interviews from a diverse group of successful traders. Some are the new young guns of trading and others are market legends who are trading just as actively today as they were over 50 years ago. They represent a diverse group of traders from the United Kingdom, America, Singapore, Hong Kong, Italy, and Australia. All of them have generously agreed to offer the reader one singularly powerful piece of advice to help them towards their trading goals. Each piece of advice emphasizes an essential element of the universal principles.
This timely and exciting book from Brent Penfold has already garnered many accolades and looks set to become a modern-day classic.
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