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(More customer reviews)Personal to the point of being colloquial, Tom Busby's new book gives you the sense that you're sitting across the table from someone over coffee, someone who is willing to share the hard-won insights and knowledge of a successful lifetime trading career. No less methodical or comprehensive for being informally written, not be mention being relatively brief (about 175 pages), you won't get through it in a day or two-or at least you'd short-change yourself if you tried. I usually highlight key passages in books like this for later review; but I stopped half way through the 3rd chapter since I was essentially turning the entire book yellow. Fortunately the "information" sections are interspaced with frequent examples, some from the markets and some from Busby's personal life. You won't find any fluff here.
Busby begins his book with a brief story of personal loss, the Crash of '87, in which he was both financially and psychologically ruined, and of his subsequent epiphany and redemption, the successful trading method he developed and parlayed into an even more profitable trading career. The description and explanation of this method forms the basis for the remainder of the book.
After the personal introductory narration he begins by describing the three core elements of his method, which he calls Time, Key Numbers and his Indicators, which he has collected and coded in software called the RoadMap. This is not, however, a self-congratulatory vanity "infomercial" from someone who is trying to sell a product. Except for a couple of specific proprietary indicators which he developed and only occasionally mentions here, everything Busby describes is essentially generic and off-the-shelf in almost any trading software product. What he repeatedly emphasizes and what lies at the heart of his method is a conceptual understanding of the global structure of the marketplace, its habit-driven repetitive nature, the importance of identifying the "Big Picture" and of correctly aligning yourself within that ("Long, Short or Out?"), the recognition of certain key numbers that are repetitively "favored" by the market (you'll have to read the book) and the necessity of follow-through support by other markets and market internals. He tells you, in specific practical ways, how to pull all of these things together, or at least how he does it. Yes, he'll do it better than you or I. But the book is aimed, it seems, at the "generalist" trader and trading student, who might benefit from a unified, comprehensive understanding of market activity and how he or she can profit from that knowledge.
Busby doesn't neglect or disparage "accepted wisdom." You'll find here all of the time-honored truisms that have been expounded by other trading teachers and coaches down through the decades. What Busby does, and does so well, is to integrate those first order principles into the logic and design of his trading method itself. Trade the method, he seems to say, and you will, by design, "trade what you see, not what you hope for," "take what the market is willing to give" and, first among equals, "cut your losses short and let your winnings run."
What I liked most about the book is Busby's emphasis on money management; if you were given a nickel for every time you read "Don't trade without a stop," you could just about pay for the book (it becomes sort of a running joke between the author and reader). Money management really does form the core of Busby's method. Don't look for a specific chapter on this subject. Instead it is so intrinsic to his method of trading that it is discussed throughout the book as it relates and is integrated into whatever specific area is being discussed. He identifies and describes how each of the method's core elements of Time, Key Numbers and RoadMap Indicators are designed specifically to facilitate capital preservation, foster risk management and help guard against the worst consequences of greed, fear and arrogance. The method itself seems to be a systematic embodiment of that honored trading maxim: Mind your losses and your winnings will take care of themselves. Except for Dr. Van Tharp, who writes primarily about money management and its psychological consequences, I can't think of another recently published author who has so successfully integrated money management into the very structure of his trading system.
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Winning the Day Trading Game: Lessons and Techniques from a Lifetime of Trading (Wiley Trading)Take a proven approach to short-term trading.
Winning the Day Trading Game offers an insider's view of the trading life and provides proven strategies for profitable trading. Professional trader Tom Busby explains how the strategies that made him so much money early on in his career ultimately failed during the 1987 stock market crash and then reveals how he reinvented himself as a high-percentage day trader. He interweaves personal experiences with technical explanations to outline the cornerstones of his technique. In highlighting his own trading experiences, Busby clearly explains how to beat the market by balancing the impulses of greed and fear, managing risk at all times; and taking responsibility for your trading.
Thomas L. Busby (Mobile, AL) has been a professional trader and broker for 25 years, working with Merrill Lynch and Smith Barney. He founded the Day Trading Institute in 1996 and it has grown into one of the most successful trading schools in the world.
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