Here is the 10th installment of my list of my trader’s gift recommendations.
I want to feature a couple of books today which focus primarily on the risk side of things. There aren’t a ton of books that do so exclusively, as many incorporate it in to the mix with other things.
Trade Your Way to Financial Freedom was written by Van K. Tharp, who was featured in the first Market Wizards book. Tharp was among the first to bring in to play the idea of modeling successful traders. That isn’t what this book is about, though. I actually think the title is somewhat deceptive as it wouldn’t seem to suggest a text focusing mostly on risk management.
Trade Your Way to Financial Freedom presents an excellent systematic way of approaching the application of risk and money management in trading. If you read it with the right mindset (not the one implied by the title), you can get a huge amount of value out of it. The concept of “expectancy” is more than worth the price of the book all by itself. There is a healthy does of trading psychology along the way also – all of which is quite useful as well.
Trading Risk by Kenneth Grant is a book I’ve only just started getting in to myself. I can’t provide a lot of direct feedback just yet (I’ll post a full review when I’m done), but I can say I like the author’s writing style. He makes a topic which can be a challenge to get excited about interesting by using a little humor mixed in with loads of information. The reviews I’ve read so far have been quite positive, so it’s definitely worth at least a look.
The Psychology of Risk was written by Ari Kiev, who is author of several other well thought of books on trading, including Trading in the Zone, and Trading to Win. This book, as its name implies, focuses on the mental side of risk and how you apply it in your trading. It is less “practical” than the other two books in terms of providing an applicable formula and whatnot, but certainly does have some very good stuff to offer the reader.