I ordered Trade your way to financial freedom (Van tharp) the first edition, however got the second. I heard that the first is better, is it true and why?
Don't know, but here is a search on Amazon. You can click on the book title(s) and see many reviews. But seems odd that second edition would be worse. Why would they take out useful info, to sell less books?? http://amazon.com/s/ref=nb_ss_gw/10...eywords="trade+your+way+to+financial+freedom"
Tharp is not a trader. He approaches the subject as an outsider. DO NOT believe the nonsense about setups/entry being unimportant and that as long as you manage the exits you will make money. This idea is VERY damaging to beginning traders. Yes exits are important but with a lousy entry you are always in pain and always on the wrong side. Book Pros ======== 1. Demonstrates the importance of position sizing. 2. Demonstrates the importance of exits and risk management. 3. Demonstrates how to measure expectancy. (After reading a every trading book I could get my hands on, it took a psychology book to show these basic arithmetic calculations!). Book Cons ========= 1. Make people thing random entries can work and setups are unimportant. 2. Makes beginners think that writing a business plan will help them be successful. The market is like a spinning whirlpool of pain. It tries to hurt as many people as possible. In order to do that it keeps changing all the time. What works today stops working next week, sucking you into the vortex. A simipleton static business plan will not help you make you money.
Yep, too many of his hedge fund clients complained about his inclusion of the holy grail in the first edition. Tough luck.
Quote from geringer: Tharp is not a trader. He approaches the subject as an outsider. Let's dispel this myth that has been repeated numerous times. Van has traded, and does still trade. His primary focus became the pshychological issues, and education that could help traders or those interested in trading. DO NOT believe the nonsense about setups/entry being unimportant and that as long as you manage the exits you will make money. This idea is VERY damaging to beginning traders. It also is not an absolute that entries are unimportant, the premise is that their importance isn't as high as most would seem to believe. Yes exits are important but with a lousy entry you are always in pain and always on the wrong side. The knife cuts both ways and exits limit losses, and aid capital preservation. Poor entry criteria with proper position sizing and low percentage or fractional percentage risk parameters may not give you a positive expectancy. However, even the best entry without proper position size, knowing how much to risk, and when or where to exit, can still produce a losing trade. There is not a trader among us who hasn't had that so called perfect entry. Watched those nice unrealized profits vanish, then a small loss become a larger one, till it could be stood no longer and closed it as a loser. So much for the perfect entry, without any exit criteria or strategy that one will follow diligently! Book Pros ======== 1. Demonstrates the importance of position sizing. 2. Demonstrates the importance of exits and risk management. 3. Demonstrates how to measure expectancy. (After reading a every trading book I could get my hands on, it took a psychology book to show these basic arithmetic calculations!). Book Cons ========= 1. Make people thing random entries can work and setups are unimportant. 2. Makes beginners think that writing a business plan will help them be successful. The market is like a spinning whirlpool of pain. It tries to hurt as many people as possible. In order to do that it keeps changing all the time. What works today stops working next week, sucking you into the vortex. A simipleton static business plan will not help you make you money. Anyone who goes into anything without a written plan, is destined for failure. Written in the sense of objective, purpose, and method. It could even be mentally. Though it is no guarantee of success, stating your business purpose will be far more beneficial than it is a hindrence. While it may not make you money, it can certainly help limit losing behavior, and give you something to refer to when all else seems to be going wrong, and you don't have the slightest clue. Enough said, take it for what it's worth. Good trading, and God Bless! Kelly
Quote from geringer: Tharp is not a trader. He approaches the subject as an outsider. imo this is a precise assessment..... he has some general ideas that are ok, but nothing in his book will help in 'trading'
And there is a hurtful idea there, that random entry with money management works. That might encourage idiots who can't trade to think that's all they need. "Hey! My entries seem to be random! But that's OK!"