Trade Your Way to Wealth: Earn Big Profits with No-Risk, Low-Risk, and Measured-Risk Strategies (Wiley Trading) [Hardcover]

Bill Kraft (Author)

Book Description

Publication Date: February 4, 2008 | ISBN-10: 0470129794 | ISBN-13: 978-0470129791

Successful trader and advisor Bill Kraft shows how to trade the financial markets in a way that limits risk and provides the potential for big profits. Kraft, who left a successful law practice to become an independent trader, explains his own educational process and how he arrived at a trading approach that primarily uses options to generate consistent income, limit risk, and participate in big market moves. In simple and down-to-earth language, Kraft explains a variety of strategies including buying and selling options; covered call writing; collars; using closed end mutual funds for income; debit spreads, volatility-based straddles; ratio backspreads; condors; and calendar spreads. Kraft emphasizes that traders need to first develop a sound and reasonable business plan ? in the same manner that any entrepreneur would plan a new business. Armed with the strategies explained in the book and a solid business plan, traders will have a blueprint for generating consistent profits in a relatively stress-free and efficient manner.

Editorial Reviews

From the Inside Flap

Trading the financial markets can be a risky endeavor, but with the right approach you can achieve success. Author Bill Kraft is well aware of the difficulties that surround trading, but during his time in this field, he's developed some distinct strategies to overcome these obstacles and enhance the performance of his portfolio.

Now, in Trade Your Way to Wealth, Kraft shares his hard-won knowledge with you and reveals how to trade in a way that limits risk, generates consistent income, and provides the potential for big profits.

Filled with in-depth insights and practical advice, Trade Your Way to Wealth skillfully explains Kraft's market philosophy—which will allow you to trade with little risk and without the need to monitor the market every day—of keeping your losses to a minimum, while not cutting your gains.

This accessible guide begins by addressing the pros and cons of "buy and hold" investing and then quickly moves on to discuss the importance of cultivating a comprehensive trading plan before you enter today's markets. With a plan in place, you'll be introduced to a variety of risk-sensitive trading strategies—primarily based on options—that will allow you to make money, and manage risk, whether the markets are going up, down, or sideways. And unlike so many other books, Kraft shows you where the risks exist and how to deal with them, so you can invest in your comfort zone.

Chapter by chapter, you'll learn how to take different strategies—from buying stocks with protective puts to selling naked calls—and apply them in real-world trading situations. Along the way, you'll discover how to efficiently integrate exchange-traded funds (ETFs) into your investment endeavors and become familiar with certain low-risk, high-yield vehicles that can produce consistent income. Many of the examples explored cannot be taxed federally, while some are even exempt from both federal and state taxes.

Whether you're new to trading or an experienced investor, Trade Your Way to Wealth has the information you need to succeed. It will allow you to capture considerable profits from today's dynamic markets, while operating in a relatively risk-free manner.

From the Back Cover

Praise for Trade Your Way To Wealth

"Wow! It is all in this book. Mr. Kraft has set forth trading concepts and specific trading ideas in straightforward language that all can understand. He clearly explains the risk levels in trading and this book shows you exactly how to enter trades with high risk, low risk, no risk, and even trades with a guaranteed profit! This is not a must-read, it is a must-study book as it delivers in-depth information and knowledge that will provide the trader with all the tools necessary to build a solid trading foundation. Trade Your Way to Wealth may be the new 'bible' for the active trader."

Eric Aafedt, MarketFN.com

"Incredibly easy to read. The trading strategies are presented in a conversational tone that is easy to understand. Almost more important to me than the strategies discussed by Bill is the framework he wants the trader to build around these strategies. His insistence on creating a plan is critical. I have seen countless failures by traders who don't operate with a plan. His advice on taking a profit also struck home with me. And lastly, his advice on being patient and disciplined and keeping fear and greed out of the equation are essential."

Phil Schwegler, Vice President, Investments, Smith Barney

"From options to ETFs to covered calls to money management, Kraft covers it all. Each chapter is jam-packed with nuggets of wisdom and exactly how to make money during any market condition. Whether you are a trading veteran or novice just getting started, his new book is a must-read."

Ty Hoffer, President, AnotherWinningTrade.com

"Mr. Kraft's book is a very informative and easy-to-understand guide to stock market investing. He takes the complex issues of options trading and simplifies these for all to understand. His analysis of risks, timing, and setting a plan to achieve wealth are all well written and provide the reader with a personal plan to achieving wealth via the stock market. This valuable guide is made to order for any American who is tired of the long workdays and grind and wishes to achieve wealth on his or her own terms. I strongly recommend this book to all who wish to understand the stock market and how it can be utilized to achieve the American Dream of greater wealth and financial freedom."

Scott M. Estill PC, author, Tax This!: An Insider's Guide to Standing Up to the IRS

See all Editorial Reviews

Product Details

• Hardcover: 204 pages
• Publisher: Wiley (February 4, 2008)
• Language: English
• ISBN-10: 0470129794
• ISBN-13: 978-0470129791
• Product Dimensions: 9.1 x 6.4 x 0.9 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (23 customer reviews)
• Amazon Best Sellers Rank: #325,041 in Books (See Top 100 in Books)

More About the Author

Discover books, learn about writers, read author blogs, and more.

Customer Reviews

Most Helpful Customer Reviews

48 of 60 people found the following review helpful:

1.0 out of 5 stars Not recommended for options traders, April 22, 2008

By 

Arthur J. Schwartz "optionstrader6" (Raleigh North Carolina) - See all my reviews
(REAL NAME)   

This review is from: Trade Your Way to Wealth: Earn Big Profits with No-Risk, Low-Risk, and Measured-Risk Strategies (Wiley Trading) (Hardcover)

If you are reading this book for options trading ideas, it can not be recommended. I was certainly interested in a "no risk" options trade which Mr Kraft presents as the collar using LEAPS. A collar is buying stock and puts while selling calls and with LEAPS it would be looking to use options with at least one year to expiration. I believe it is possible to find collars with time frames of one year or longer that have no risk however -- there is a cost - which Mr Kraft does not discuss and the cost may be greater than the risk!!! For example, consider a stock trading at 52, 730 days to expiration, 35% voltility, 5% risk free interest, no dividend. The Black scholes formula values the 50 strike put at $7.04; the 60 strike call at $9.32. It appears that one can make an easy $2.28 (=9.32-7.04) if the stock does nothing and ends exactly at 52; that would represent a 2.28/52=4.4% return. But 1) the cost of holding that stock and buying the put (theres no margin required for selling the calls against long stock) is 52+7.04=59.04*.05*(risk free)*2years = $5.90. The true net return is MINUS 3.62 =2.28-5.90. That does not consider the opportunity cost of tying up your money for two years. There may be some good ideas in the book on the trading plan and generating tax free or low taxed income but there do not seem to be any really good ideas on trading options...

41 of 52 people found the following review helpful:

1.0 out of 5 stars Disappointing - basic info., March 8, 2008

By 

Anonm (USA) - See all my reviews

This review is from: Trade Your Way to Wealth: Earn Big Profits with No-Risk, Low-Risk, and Measured-Risk Strategies (Wiley Trading) (Hardcover)

When I read the title, and other reviews, I was very excited and little skeptical too.

Just for reference, although I am not a full time trader, I have been trading stocks, options, and futures for the last 10 years. With that background, here is what I found in the book.

The Good:
- The chapter on considering trading as business and the need and outline for the business plan is important. It gives a nice reference. I must say that I found author's blog on the same topic, so don't go for the book just for this.
- Information about the closed funds which can earn tax free interest may be useful to some. This information may be available online, but I would not expect to "earn big profits" (as the title suggest) using them.

The bad:
The book shows a few options trading strategies such as collar (as risk free to low risk free), iron condor, spreads, etc. I found these strategies to be very basic or introduced for novice traders.
- While there is a risk free strategy (collar) may be available(which is highly improbable), you may not be able to 'make millions" as the title of the first chapter suggests. In fact, in today's technical world there are computers with algorithms to find such inconsistencies. It will be difficult to find a collar trade where you will find credit (meaning sell a higher strike call which will pay for the put and may leave some money on the table). Usually collars are debit transactions.

The ugly:
- The book title and some of the introduction in the first chapter does not live up to the expectation built.
- I found the book quite overpriced for the info. provided. Now a days, most of the information/advice can be found online (e.g. chapter on "What you need to get started") and for novice traders only.
- While the author stresses on the business plan, I was surprised that he did not include a real life example of his own business plan in any trade examples. There is no trade technique discussed in detail on "what, why, when, and how" of the trade.

Overall, I would not recommend the book for the price (or look for it in the library or in the bookstore). There are much better titles available (I am not going to list them as it will depend on the audience from novice to experienced.)

7 of 7 people found the following review helpful:

5.0 out of 5 stars If you want to be a successful trader, you should read it, April 8, 2009

By 

N. Shen "Macky" (Iowa USA) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Trade Your Way to Wealth: Earn Big Profits with No-Risk, Low-Risk, and Measured-Risk Strategies (Wiley Trading) (Hardcover)

I bought this book at the end of last year. I just finished my first reading and begun my second reading with more detailed notes. I feel that I wish I had this book long time ago. I have been treading for many years, but not very successful. I want to improve myself. After reading this book, I felt I learned a lot form the book. I modified my trading plan and fine-toned some charting techniques according to the suggestions from this book. I might post some of my detailed reading notes on author's newsletter's forum after a few month of trading.

To make a long story short, I'd say that this book is not for the beginners. It's not a primer for investment. It better fits to the people who have some knowledge about trading and want to improve themselves. This book lists a lot of detailed trading practices/examples, not the fake stock XYZ as a generalized scenarios. These examples are very useful, at least to me for better understanding the techniques.

At the end, I would say that I highly recommend this book to anyone who want to improve themselves.