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How I Trade for a Living Hardcover – October 26, 1999
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Top Customer Reviews
Author goes to length to explain an Indicator then several pages later will tell you he finds the indictor doesn't perform any more! Well what does? he spends a lot of time discussing his evolvement as a trader over 19 years!!
Lots of talk of momentum and late day reversals, which are suppose to be strong bullish indicators. These don't seem to work as evidenced by 12/6's strong momentum and no follow thru the next day! Also for intra-day trading which I've found to be brutal, unless you enjoy staring at your monitor for 8 hours a day! I've also heard over and over that the Big money is in trading short term (3-10 days) or long term, not intra-day.
He does spend time discussing how he USE to trade index futures and some of the patterns he used. However, these too were confusing and contradictory. Ex. "My original price patterns continue to work for me, but only because I filter my trades with the action of the tape."
What does that mean?
I found books by William O'Neil much more clear and consise.
Gary's story is like that of many traders (including myself:) Years of struggle and frustration in a seemingly futile attempt at beating the markets. Gary recounts his failures and his spectacular success: Since 1985 his account has grown from a paltry $2200 into over $650,000 (this amount does not include withdrawals for living expensese, so profits are even greater.)
Gary also tells us how he trades, what indicators he uses, and details exactly how he trades. In perhaps the best and must useful chapter "The Nitty-Gritty of Trading," Gary takes the reader through actual trades, which explain his methodology in great detail, which can be applied to stocks, mutual funds and stock index futures.
Though this book has my highest recommendation, I should warn the reader that this book is written for the serious trader. There are no magic formulas, just wisdom from a great trader. I plan on reading it many times.
A couple of things stand out. For one Gary says he does not place much value on charts and indicators, yet using these methods, he determines when he will increase his exposure to his mutual fund positions. The second (now being August 2001) he explains that most of his money was made by investing in technology funds with his various chosen fund families, funds that often mirrored the NASDAQ.
Looking back at the times when he was most active and making money, so were most people. I mean he was trading at the time of tech hype and crazy stock prices for basically any tech related company. My point is just about anyone could have made money trading at this period in time, you could have thrown a dart at the telco or internet sectors and bought whatever you hit and made money. How many stories have been told of amatuer investors running small capital to vast profits by just playing tech stocks.
Things are not the same anymore, and may never be in this relatively flat market, I would like to know how he is fairing now. I think a lot of contradictions come out of his book. The fact that he also trades primarily mutual funds and not individual stocks, options, futures etc, also makes me wonder how much of a trader he really is, Mutual funds are good for the grandma and grandpa investors, with empahasis on investors and not TRADERS.
I always get weary of succesful traders who suddenly become authors, it may yet be the best sentiment indicator of tough times ahead in the markets.
1) Self-knowledge. Mr. Smith did not enter day trading for the glamour. He treats it strictly like a business. He comes across as a person with a solid inner core, perhaps gained by many years of contemplation during his early, lean years. His reading list appears to have something to do with this; he remarks [p. 231] "Looking at my massive collection of trading books, my friend commented about all the money and time I had wasted accumulating this stash of books since, obviously, they had done me no good. Fast forward 21 years, and my friend is still searching for his opportunity to get rich, while my trading account is closing in on $700,000...I believe reading as much as you can about trading and the stock market is part of the process of becoming a successful trader yourself."
2) Persistence. Mr. Smith endured many years of treading water before he began to consistently make money - the first 19 years of his 36-year career so far. This of course was initially fueled by passion, following his reading of Nicolas Darvas's "How I Made Two Million Dollars in the Stock Market" at age 14. Smith's initial passion had many years of follow up, such as [p. 197] "[During the 1960s], while most of my fellow students spent their free time partying or debating and protesting the Vietnam War...I could be found at the local stock brokerage office. There, sitting next to veteran traders in their seventies and eighties, I watched excitedly as the stock quotations rolled across the large ticker tape...Read more ›
Most Recent Customer Reviews
I trade the US mkt. I identified with many problems mentioned by Gary Smith in the book. His book was a great read and in many ways instructive.Published 13 months ago by Ray Tomaszewski
Outstanding company to deal with. Great product and service!Published 17 months ago by Homer L. Cook
With the exception of "Forex Price Action Scalping" which I just started reading, I don't buy books to learn any trading methods (and the scalping book I bought to compare his... Read morePublished on December 31, 2012 by ArtFan
This is probably one of the two best books I have ever read on Trading. I have over 38 books on Trading on one Shelf of one of my bookcases and there are none other than possibly... Read morePublished on February 13, 2012 by T. J. Lattimore
This is one of the best books on trading ever written. If you don't like it, maybe you are looking for a quick and easy way to get rich, refusing to accept the hard way as the only... Read morePublished on April 7, 2011 by Malcolm65
I have traded professionally for an investment bank, and 2 HFs since 2000. I trade long/short equities with a large directional bias. I would highly recommend this book. Read morePublished on June 19, 2010 by Wedding Paycheck
There are tons of trading books out there, but this is book to me is very special. The reason? It was written by a guy who tried for many years to succeed, ran up against a wall... Read morePublished on June 16, 2010 by GeorgeS