Summary
One of the most important books on money management you will ever come across. It is also the trading book that everyone loves to hate. Recommended to all newcomers.
Book Information
Trade Your Way To Financial Freedom
Written by Van Tharp
Rating
| Useful | |
| Original | |
| Readable | |
| Average | |
Video Review
Review
I waited for my copy of the 2nd edition of this book before completing the review because I thought the new edition could be very different from the original one I bought many years ago. It turns out the 2nd edition published back in 2006 has changed quite a lot and the focus of this review will be on the 2nd edition only.
No doubt that this book is probably the most important book a newcomer to trading will come across in terms of learning about the importance of money management. It spends a lot of time explaining how money management works and how it will affect you. If you can read and reread the book a few times and let the concept sink in, you will look at financial markets in a completely different way from your old self.
At times, the materials can becoming quite boring. It is the main issue with the book. The other issue is that even if you managed to learn everything from the book but you are not well capitalized, you will not be able to utilize the strategies properly.
The only vehicles I see that you can apply the concepts with small amount of starting capital is trading micro lots in forex. For other instruments it will be quite difficult to trade yourself to financial freedom when your seed capital is like 20,000 or less. Hence the title of the book is sort of misleading.
Overall it is a must read for anyone who wants to build a solid foundation in their understanding of money management. It will be useful even if you cannot apply the concepts in your own trading initially because you will now have a goal to aim for – to become capitalize enough so that you can use money management edge to win the game.
