Super Trader, Expanded Edition: Make Consistent Profits in Good and Bad Markets By: Van K. Tharp
This book has received mixed reviews from active day traders seeking to increase their skills but that should not deter those looking to scratch beneath the surface of technical skill to enquire what really makes a good trader a success. Whilst he certainly provides a good summary of the technical aspects of trading it is without distinction in a very crowded marketplace.
What’s its worth, you might be thinking? Van K. Tharp’s argues that the most important elements of successful trading are psychology and risk management, and while this is a common theme the over arching emphasis is where his book differs from other books strictly about strategy. Its strengths lie in providing the reader with real-world examples of why a disciplined approach will always yield better long term results then when fear or emotion dominate the decision making process to either buy or sell.
To do this Van Tharp uses a novel approach to describe risk by introducing the reader to the risk unit he calls ‘R’. This is not R in the statistical sense, but a variable representing risk vs return. R is nothing more than the ratio of risk relative to reward and helps illustrate the benefits of opting for lower risk trades, albeit more frequently.
For instance, if a decision to risk $200 of capital returns a profit of $1,000 you might very well be happy with the result. In terms of risk units, the investment would rate at +5R. However, if you were to risk invest that same amount in a trade with a risk rating of +1R 30 times, you would pocket a profit of $6,000.
The book is aimed at a broad range of readers, from the novice to expert. While, you might be forgiven in taking the view that Van Tharp really brings nothing new to the table it is his style and examples that make this book well worth a read. If but nothing else, Van Tharp is an excellent teacher of what are or should be good trading habits.
Categories:
Intermediate,
Probability,
Risk
I think that book is one of must read book for financial trader. The major part has been dedicated to one of the best indicators of the trader’s money management, R-multiples. The next major part is about trader’s psychology and trade your way to financial freedom is about the strategy used in marketing . The topics covered by this book are like, starting a trading plan, how to do it and how to handle the problems and all. It also covers the important industry rules and some questions which are helpful in analyzing ourselves and to know the basic aspects of trading.
The book is divided into three parts. First part deals with basic things about marketing and how to set goals. The second part deals with the information on how to develop, select and understand the marketing concepts. Finally the third part deals about market timing, profits, position sizing and things like that.
There are some drawbacks in this book. The author did not explain in detail about the trading analysis. This book gives you the guidance and not the basic idea about trading. You should first set your goal and then can use the help of this book to proceed further. Else this book is hopeless for those who do not known their goal. Another negative point about this book is the contents are very tough to understand unless you have some knowledge about the basic terms used in trading. This book will be the best one for those who already have knowledge about trading and they can improve their way of trading with the help of this book.