Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House

ISBN-13: 9780470933091 / Angielski / Twarda / 2011 / 288 str.

Richard L. Weissman

Opis

A detailed look at the common characteristics found in most successful traders While there are a variety of approaches to trading in the financial markets, profitable traders tend to share similar underlying characteristics. Most have a methodology that they believe will prove profitable over the long run and are willing to endure short-term setbacks. If you're looking to make the most of your time in today's markets, you need to understand what separates the best from the rest. And with Trade Like a Casino, you'll gain the knowledge needed to excel at this challenging endeavor. Engaging and informative, this reliable guide identifies and explains the key techniques and mental processes characteristic of successful traders. It reveals that successful traders operate very much like a casino in that they develop a method that gives them "positive expectancy" and they unflappably implement the method in the face of changing, and oftentimes volatile, market conditions. Page by page, the book explores the intricacies of methodology, mental control, and flexibility that allow traders to develop and maintain the casino-like edge.

• Reveals how many successful traders tend to follow the same general principles, even if their approach to trading may differ
• Explores how to account for the risk of being wrong and the market moving against you
• Discusses how to develop an approach that combines trade selection with sound risk management, avoids emotional attachment to positions, exploits volatility cycles, and focuses on market action

Regardless of how you approach markets, the insights found here will help improve the way you trade by putting you in a better position to distinguish the differences between successful and unsuccessful traders.

Spis treści

Preface xi 

Acknowledgments xvii

Part I The Casino Paradigm 1 

Chapter 1 Developing Positive Expectancy Models 3 

Why Technical Analysis Helps 3 

The Inefficient Market 6

If It Feels Good, Don′t Do It 10

Just Make the Money 15

Final Thoughts 21

Chapter 2 Price Risk Management Methodologies 23

One Sure Thing 23

Base of Pyramid 26

Middle of Pyramid 37

Apex of Pyramid 47

Pros and Cons of the Risk Management Pyramid 49

Putting It All Together: A Case Study 49

Final Thoughts 51

Chapter 3 Maintaining Unwavering Discipline 53

Defining Discipline 53

Discipline and the Positive Expectancy Model 55

Types of Traders 61

Discipline and Price Risk Management 64

Patience and Discipline 67

Final Thoughts 70

Part II Trading Tools and Techniques 71 

Chapter 4 Capitalizing on the Cyclical Nature of Volatility 73 

The Only Constant 73

Defining Volatility with Technical Indicators 76

Building Positive Expectancy Models with Volatility Indicators 89

Final Thoughts 94

Chapter 5 Trading the Markets and Not the Money 95 

Ten Thousand Dollars is a Lot of Money! 95

Baby Needs a New Pair of Shoes 99

Trading with Scared Money 100

Time is Money 101

Final Thoughts 104

Chapter 6 Minimizing Trader Regret 105

The Softer Side of Discipline 105

Issues for Trend–Followers 106

Issues for Mean Reversion Traders 113

Final Thoughts 123

Chapter 7 Timeframe Analysis 125

Traditional Timeframe Analysis 125

Timeframe Confirmation Trading 131

Timeframe Divergence Trading 131

Final Thoughts 142

Chapter 8 How to Use Trading Models 143

Mechanical Trading Systems 143

Nonmechanical Models 162

Equity Trading Models 170

Final Thoughts 175

Chapter 9 Anticipating the Signal 177

Always Trade Value, Never Trade Price 177

Support (and Resistance) Were Made to be Broken 179

Don t Anticipate, Just Participate 181

Final Thoughts 187

Part III Trader Psychology 189

Chapter 10 Transcending Common Trading Pitfalls 191

Characteristics of Market Behavior 191

Obstacle Makers to Growth as a Trader. 195

Final Thoughts 202 

Chapter 11 Analyzing Performance 205 

A Due Diligence Questionnaire 205 

Trading Journal 225

Final Thoughts 236

Chapter 12 Becoming an Even–Tempered Trader 241 

The I Don t Care Guy 241 

The Master Trader 244 

Reprogramming the Trader 247 

Flexibility and Creativity 248 

Meditation 250 

Visualization 251 

Somatic Exercises 253 

Final Thoughts 254 

Notes 257 

Bibliography 263 

About the Author 265 

Index 266

O autorze

RICHARD L. WEISSMAN is a trader, trading system developer, and educator on trading and risk management. As senior associate with the Energy Management Institute, he holds seminars and webinars for professionals on trading and risk management. Weissman is a former member and trader at the New York Futures Exchange. He has written articles on trading and technical analysis for a variety of industry publications and provides independent consulting services to traders and risk managers on technical analysis, derivatives, and trading system development. Weissman is also the author of the Wiley title Mechanical Trading Systems.

Blurb

Trade Like a Casino

While trading is a difficult endeavor, it′s still possible to make money doing so in today′s markets. The real question is: how can you achieve this goal?

What is required is adapting a successful existing business model to this speculative arena. The model that makes most sense is the "casino paradigm" and nobody understands it better than author Richard Weissman a professional trader with over fifteen years of experience consulting and training traders and risk managers.

And now, with Trade Like a Casino, he reveals how successful traders tend to operate like a casino in that they develop a method that gives them "positive expectancy" and then unflappably implement their approach in the face of changing, and oftentimes volatile, market conditions. Page by page, this reliable resource explores the intricacies of methodology, mental control, and flexibility that allow traders to develop and maintain a casino–like edge. It also addresses some of the more complex issues that surround this model of successful speculative trading.

Divided into three comprehensive parts, Trade Like a Casino skillfully:

• Introduces the casino paradigm of trading with respect to the development of positive expectancy models, price risk management, and trader discipline
• Reveals the best–kept secret in trading, the cyclical nature of volatility, and offers insights on the tools needed to measure it
• Discusses the importance of timeframe analysis and one of the most important tools associated with it time frame divergence
• Highlights a wide array of positive expectancy trend–following and mean reversion trading models
• Covers common trading pitfalls and how to transcend them as well as a wide variety of techniques for analyzing and improving trader performance
• Examines the psychological mindset required to succeed with a positive expectancy model

Successful traders don′t need luck, since they consistently play the probabilities and manage risk. That′s how casinos win, and with this book as your guide, that′s how you′ll learn to win in today′s dynamic markets.