Categories
Trader Resources

The Doctor is Out

For those who may not have heard, Brett Steenbarger has called a halt to his blogging. Brett, who is one of the contributors to the trading FAQs book I’ve put together (and author of [easyazon-link asin=”0471267619″]The Psychology of Trading[/easyazon-link], Enhancing Trader Performance, and The Daily Trading Coach) has been enlisted by a hedge fund to help them with their trader development on a permanent basis. That’s created a situation where it would be a conflict for Brett to also be writing for public consumption on the subject. As a result, he’s been winding things down on the blog the last couple weeks.

Brett is not taking the blog down all together, though. It remains up as an on-going resource on the subject of trading psychology. If you’ve never been there, I encourage you to visit http://traderfeed.blogspot.com/

Categories
Reader Questions Answered

Help! I Can’t Stick to My Trading Plan

Here’s a question I received over the weekend that I know is one a great many traders have. It’s about trading discipline.

John
Hi. My question is as follows:

I have a couple of systems that have made good money on a stand alone basis over the past 6months or so. Long may it continue

Yet, I continually throw away money taking some very subjective decisions, trading with bias and squandering the hard earned gains

I am going through reading some very powerful psychology books at the moment by eg. Mark Douglas. They are helping. Please can you provide some additional pointers please to ensure that discipline is upheld at all times

Regards

Vimal

One of the more annoying aspects to many so-called trading psychology books, articles, discussions, and what have you is the “be disciplined” advice provided. That’s kind of like telling someone to be happy. It’s pretty useless. It demands that the question “What is causing me to lose discipline?” be asked and answered, since no one willfully decides not to be disciplined.

To that end, I recommend reading Brett Steenbarger’s first book, The Psychology of Trading. Brett’s second book, Enhancing Trader Performance, and his latest release, The Daily Trading Coach, are both excellent resources as well, but more in terms of overall trader development. The first book caught my attention for discussing quite specifically the ways and reasons traders lose the discipline in their trading, causing all the problems and frustrations Vimal outlines above. Through a series of examples, Brett demonstrates from his own therapy experience the things which can create psychological pitfalls in trading, and of course in life.

Good trading requires a degree of self-awareness – understanding what you’re doing and why. The is a reason why Vimal is going off the script and not following his trading plan. I’m not qualified or knowledgeable enough about his situation to be able to say what that might be. My basic view is that either he doesn’t trust his system explicitly or that in some fashion the way the system operates doesn’t quite mesh with his personality.

If you’re in a situation like Vimal, definitely give Brett’s first book a read. At the same time, step back and take a look at what you’re doing (or not doing) to see if there are patterns you can identify. Keeping a trading journal will help in that regard a lot.

Categories
Trading Book Reviews

Book Review: The Daily Trading Coach by Brett Steenbarger

[easyazon-link asin=”0470398566″][/easyazon-link]Today is the official release date of Brett Steenbarger’s latest book, [easyazon-link asin=”0470398566″]The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist[/easyazon-link]. If you’ve spent any time on this blog at all you’ll know that I’m a big fan of Brett’s. His two previous books, [easyazon-link asin=”0471267619″]The Psychology of Trading[/easyazon-link] and [easyazon-link asin=”0470038667″]Enhancing Trader Performance[/easyazon-link], are both excellent.

I first linked up with Brett back in 2005 when I was the Content Editor for Trade2Win and he was an article contributor. That was when I was writing The Essentials of Trading. Knowing Brett’s background working in new trader development, I asked him to give the original draft a look. Brett actually got me hooked up with my publisher, Wiley. Later he would write the forward. I was quoted in Brett’s last book, and also contributed to this one, along with several others in a section incorporating the thoughts of experienced market folks.

The Drawbacks – From My Perspective
My one gripe with the book is the Wiley Trading internal book template. They make all their books look the same and I really don’t like the design. Brett was able to improve on things a little bit in places, but Wiley really needs to come up with something new for their layouts.

Also, did this really need to be a hard bound book? The cover actually looks more like it would be suited for a soft bound one and you could definitely argue that the intended use of the book would better suit a soft cover.

Very Solid Content
Complaints aside, this is an impressive book. I would go so far as to say potentially daunting. It is, as the title suggests, broken up into lessons which are then grouped into sections of related topics. Brett suggests in the introduction that the book isn’t really intended to be read straight through, but rather by lesson or section as needed.

I think pretty much every trader can find useful lessons in the book, and I was immediately struck by how relevant quite of a bit of it was to life beyond trading as well. Brett draws on research and experience working with traders in explaining how to deal with the different types of circumstances traders can find themselves in, but doesn’t let it become an academic discourse. Each lesson has action items, so the reader can not just understand what’s causing them to feel they way they feel or act the way they act, but to also address it.

How I’d Use the Book
I am, however, going to disagree with Brett on how best to use the book – at least initially. The problem is the table of contents. It’s daunting in its density. I mean that both in terms of listing all of the 101 lessons and also the titles of them. Lots of multi-syllabic words, which isn’t surprising given the psychology and development focus of the book and the background of the author (former practicing therapist). It might have you wondering how you’ll ever get through it all as it sounds very intense.

Of course each lesson is only a couple of pages long, so it’s not really that bad once you get down to it. That being the case, I’d suggest an initial skim through the book. Flip through and get yourself acquainted with what’s in the book. Read the lessons that grab your attention. Brett has done a really good job in the text of drawing your attention to key ideas and points.

Conclusion
As much as the Wiley layout bothers me, in the end a book must be judged on the content. That being the case,  [easyazon-link asin=”0470398566″]The Daily Trading Coach[/easyazon-link] gets high markets. It will be going on my recommended reading list.

Categories
Best Of Trader Resources

The Trader’s Wish List

Welcome to my Trader’s Wish List of good books, audio and video content, and other resources. The list comprises a dozen posts, each with somewhat different themes.

Here’s how they break down:

Entry #1: Books by Brett Steenbarger

Entry #2: The Market Wizards Collection of Books, Audio, and Video

Entry #3: Liar’s Poker – a view from the inside

Entry #4: Paul Erdman Books – great financial fiction

Entry #5: The Darker Side of the Markets – stories of the bad boys

Entry #6: Trading and Markets Movies – drama to comedy

Entry #7: Market Profile

Entry #8: Trading Fiction – great stories around trading

Entry #9: George Soros and Jim Rogers – two of trading’s biggest icons

Entry #10: Risk and Money Management

Entry #11: Metastock – fantastic charting and system development software

Entry #12: Everything Else!

By all means, feel free to add your comments, thoughts, suggestions, and whatnot. What do you like, don’t like, recommended, advise against, enjoy, hate?