Better Trading

If you are trading for a living, this is an add-on book you should have. From the author of the Guppy Multiple Moving Averages, there's always new things that you can learn in any of the books he published.

Today, I learned about :

(1) Equity Curves You need to chart your Trading equity on a graph to "see" the trading performance visually. Many traders miss this point. They use MAs but failed to chart a moving Average for themselves. Drawdowns can be detected immediately when you see your own graphs.

 (2) State of Markets Young, Robust or matured?... Obviously you should catch the trend as early as possible but some traders prefer to catch only the middle third of the trend ie the robust part. A rule of thumb is to catch Longs from a % bounce from the bottom , say 10% or 20%. Technical recession is 20% from the top, so we should also do the same.

 (3) Flinch points The flinch curve is a very unique way of profiling the trader's response to stop loss.

He starts with :

 (A) Performance profiling : comparing various trading strategies eg buy and hold vs managed trading

 (B) Protect capital : his "flinch curve" is very enlightening

(C) Protect Profits : his "Grow-Up Strategy" is worth looking at

 (D) Protect Portfolios : do the "swiss roll "

 Allocate 1 month for this book. You will be lucky is you can go through the heavy stuff at one Part per week.