Trader Vic: Methods of a Wall Street Master

This book is written by a real market master. It is by a professional who made high double digits returns every year for over a decade, making high 6 figures in profits each year. So you do not have to worry about him telling you theories or trying to advertise his newsletter or sell web site services through out the book. He was retired when this book was written and he has shared with his readers what he had learned from the markets. the majority of this book will be familiar to you if you have studied other legendary traders. "...you have to trade by rules and principles that take precedence over your feelings or wishes." "...cut your losses short." "..when you are wrong, close your position! Don't rationalize, hope, pray, or anything else, just get out..." The author based his business philosophy on three principles: preservation of capital, consistent profitability, and the pursuit of superior returns. This is the Holy Grail of successful trading. The author uses Dow theory as his main method of trading. He states: "If you know what the trend is, and if you know when it is most likely to change, then you really have all the knowledge you need to make money in the markets." I have found that to be true in my 10 years of active trading. That is the only principle that makes money long term in any market. "Following the trend is the way to make money in the financial markets." Victor Sperandeo liked to call the major tops and bottoms and take the trend reversal trade when new highs failed or new lows stopped being penetrated. He believed that "Gambling is taking a blind risk. Speculation is taking a risk when odds are in your favor."His rules:1. Trade with a plan and stick to it.2. Trade with the trend. The trend is your friend!3. Use stop loss orders whenever practical.4. When in doubt, get out!5. Be patient. never over trade.6. Let your profits run; cut your losses short.7. Never let a profit run into a loss.8. Buy weakness and sell strength. Be just as willing to sell as you are to buy.9. Be an investor in the early stages of bull markets. Be a speculator in the latter stages of bull markets and in bear markets.10. Never average a loss-don't add to a losing position.11. Never buy just because the price is low. Never sell just because the price is high.12. Trade only liquid markets.13. Never initiate a position in a fast market.14. Tips are for waiters. Trade with the trend not your friend.15. Always analyze your mistakes.16. Beware of "takeunders". (Bad mergers)17. Never trade if your success depends on a good execution.18. Always keep your own records of trades.19. Know and follow the rules!"The purpose of rules is to make executions as objective and consistent as humanly possible."To trade well you have to:1. Establish goals.2. Acquire knowledge of the markets.3. Define rules of trading that work.4. Execute in strict adherence to the rules.This book is packed full of trading techniques, methods, risk management, discipline, trading psychology, economics, and much more. Even though it was written many years before the internet age the contents of the book are timeless. It will make you money, and it is among the top ten of the hundred+ trading books I have read.

It may come as a surprise that there are still folks reviewing this book years after it was written. That is testimony to the fact that this book is timeless and can be put to work today.Mr. Sperandeo's application of Dow Theory as a primary indicator is as valid today as 10, 20, 40 years ago. The events and psychology that drive the market are still in place, greed, fear, over confidence, self doubt, etc. were part of our make up long before there was a DJIA and will be around long after we are gone. His discussion of what are primary tools and what are secondary and confirming indicators or tools is very helpful especially to new traders.There are great books on Technical Analysis and he references some of them here, but one of the challenges is they can become and endless list of moving average, stochastic , exponential, indicators that can be applied in almost infinite combinations. Mr. Sperandeo gives great examples of how to balance primary trends with what underlying or secondary indicators are telling you.I have been trading almost full time for a couple of years and while I wish I would've read this book sooner, I am glad that I had some hard times trading to draw from. A good portion of the book is dedicated to emotion and psychology. When I was first preparing to attempt to trade for a living all I really cared about was the hard analytical material and tools I could apply right away. That was good and important, but what sidetracked me was the emotion and psychology.Successful trading is hard. Going from occasional trading to a mindset of doing it for a living overnight is hard raised to the 10th power. It is one thing to have a couple of bad trades,and having a couple of bad trades and then falling into near paralysis because those weren't just losing trades, but now they are going to affect making house payments, car payments, etc. Mr. Sperandeo discusses these issues in some detail and they are important. They are especially relevant once you skin your knees a couple of trades, and know this for a fact, you will skin your knees sooner or later.Additionally, he does something that very few market authors do, discuss the combination of fundamental, technical, and macroeconomic analysis. A lot of trading and investing books lay out some pretty defined lines: technical or fundamental, and never the two shall meet. Mr. Sperandeo does an exceptional job of outlining how none of these factors are magic bullets nor do they occur in a vacuum. They are inter-related and by studying and incorporating them it increases your confidence in your position and will help address some of the emotions that come with the territory.There are some spots in the book that it shows its age like when he relates a story about the power going out in his building and running outside to a pay phone to call the trading pits. There are some other spots, like when he discusses Citibank that seem prophetic and I found myself jumping back to see the copyright date.Don't let the release date deter you if you are considering this book. I think it is a must have on your shelf whether a part time investor or trader or trying to make a living from it.

Must read for all investors, beginners to advance. Unfortunately the author should stay away from psychology since his info. is dated not relevant and uninformative. He should stay within his sphere of expertise which is investments…stocks.

This is probably one of the best books that i have ever bought on the topic of speculation. Not only is it helpful in trading but also gives you a basic understanding of banking, economics as well. Thanks a lot Trader Vic

envoi rapide et soigné, conforme à la description, rien à signaliser

I don't use this book for trading per se, but can testify to it's brilliance in explaining how the real world works in terms of economics. I have bought this book for friends and all of them have been amazed at how it lays everything out in simple language that is relatable to normal people.If you read this book then you'll understand more about economies and why they work the way they do which means you'll know more than 95% of the population.I used what was described in this book to sell out of banks in 2007 and can now read financial pages with understanding, and knowing full well that most of it is complete fluff and guff.Educate yourself about how the world actually works and buy this. I can't recommend it enough.

One of the most valuable books that I have!amazing information, and important details.Essential If you want learn so much about this!

That's a great book I recommend to every one that builds his own knowledge from the ground up.This books is easy to study - 3 days - and the knowledge that *pass the test of time* is very practicable and in most other books I have - over 40 - I found little about that was Trader Vic successful used over 24 years.It's nothing about post modern stuff and countless indicators nobody can understand fully.It's a toolset that enable Investors, Speculators and Traders to gain success without getting a slave of modern computers, with function overloaded programs and financial instruments white a risk that burns your ass away.Trader Vic tell simple and effective what's a good way to stay in business for a longer period. He told about common mistakes that come from human behavior you can found everywhere. Also he shows a way to learn about mistakes to make it not to the lossing basis of your short time on earth.