Rules of The Trade: Indispensable Insights for Online Profits (Hardcover)

~ David Nassar (Author) "With the emerging gateway to electronic trading opening wide due to revolutionary changes in the securities industry, a volatile stock market, and technological advancements, the..." (more)
Key Phrases: leading limit orders, finding liquidity, electronic trader, Gainers Avg, New York Stock Exchange, Chicago Mercantile Exchange (more...)

Editorial Reviews

Product Description

The concise, common-sense insights of a day trading pro

Some traders spend thousands of dollars attending training seminars. If you don't have the time or resources for that, pick up Rules of the Trade instead. This reliable, no-nonsense guide distills the insights of several online trading experts into one short, quick, and easy-to-read book that not only lists the rules, but explains what the rules mean, why they're important--and the high costs of overlooking them even once.

Packed with real-life examples to illustrate key points, this book-- written by David S. Nassar, author of the bestseller How to Get Started in Electronic Day Trading -- will teach you the basic rules of survival, help you preserve capital, learn the ropes, and go on to succeed in this lucrative but volatile profession.

From the Back Cover

From the bestselling author of How to Get Started in Electronic Day Trading

Everything You Need to Know to Become a Confident, Knowledgeable Online Trader

Successful traders know:

The rules for profitably trading today's fast-moving stock markets are consistent and dynamic. Traders who don't follow these rules won't last long and may never know how close they were to true trading mastery­­if they had just known the rules.

Rules of the Trade gives you the building blocks toward becoming a profitable, market-wise trader. This detailed examination­­written by acclaimed trader, trainer, and writer David S. Nassar­­shows what traders must do to succeed. Its market-proven rules will show you how to cut losses short and let profits run in every aspect of electronic trading, including:

• Entering and exiting trades
• Psychological discipline
• Stock selection
• Hedging risk
• Evaluating performance
• Utilizing technology and the Internet
• Money management

High-stakes online trading requires discipline, knowledge, and a strict adherence to time-tested rules of trading and market behavior. Rules of the Trade tells you what those rules are, gives you the knowledge and instincts to use those rules perceptively, and shows you how to take full advantage of today's volatile and turbulent stock markets­­history's greatest opportunity for individual investors to garner significant trading wealth.

"(David S. Nassar) has done an excellent job assembling the key characteristics and attributes traders need that are often ignored."

­­William Lupien, Chairman, OptiMark Techologies, Inc.
From the Foreword

The online trading explosion is the first great wealth-building event of the twenty-first century. As today's ultravolatile markets generate one profit opportunity after another, savvy traders are learning how to consistently leverage substantial profits from every market­­whether going long in up markets, selling short in falling markets, or grinding out profits in sideways markets.

But before you can succeed in this arena, you need a foundation in the rules­­both psychological and operational­­that separates the true professional trader from the pretender. In Rules of the Trade, David S. Nassar­­author of the bestselling How to Get Started in Electronic Day Trading and a highly profitable and active trader in his own right­­explains exactly what these rules are and why they are critical for everyone from beginning traders to experienced, seasoned market veterans.

Concise, to the point, and packed with real-life examples of key rules in action, Rules of the Trade is the one book that traders must read­­and review daily­­to keep their instincts razor-sharp. All traders, regardless of their expertise or experience, will profit from detailed, insightful descriptions that include:

• Why the opening 15 minutes should be watched­­not traded
• Eight attributes of a tradable stock
• The importance of mentors
• Differences between acting and reacting­­and how to profit from each
• How to control greed and fear while maintaining an edge
• Three market stages that drive prices­­critical knowledge for sizing a trade
• Interviews and insights from the "one percenters"­­Five top traders share how they approach the market

Whether markets are bull, bear, or turbulent, one aspect remains clear­­many active traders are making a lot of money. Let Rules of the Trade show you how to join their ranks, and greatly increase your odds of profiting by every trade, while building confidence and limiting risk!

See all Editorial Reviews

Product Details

• Hardcover: 253 pages
• Publisher: McGraw-Hill; 1 edition (February 22, 2001)
• Language: English
• ISBN-10: 0071354638
• ISBN-13: 978-0071354639
• Product Dimensions: 9.3 x 6.2 x 1.1 inches
• Shipping Weight: 1.3 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (16 customer reviews)
• Amazon.com Sales Rank: #1,086,665 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

23 of 24 people found the following review helpful:

2.0 out of 5 stars not particularly useful, September 19, 2003

By	a professional trader (Colorado Mountains) - See all my reviews

Although this book has a copyright date of 2001, it apparently was written in early 2000, just at the start of the NASDAQ crash that ultimately resulted in a loss of over 75 percent of its value. Consequently, the author refers to a period of time when stocks traded in fractions, and high-flying tech stocks trading in the triple digits were "momentum" traded by daytraders. After the crash, many of those tech stocks trade in the single digits, all stocks now trade in decimals, and the "momentum" daytraders and their daytrading brokerage firms are now history. The author makes numerous references to "shadowing the axe" using Level II quotes to determine who is on the inside ask or bid. Nowadays, ECNs virtually always sit on the inside ask and bid, making it impossible to utilize that strategy. Even if a market maker had a large enough position to sit in front of the ECNs, he most likely would route much of his order to an ECN where it would appear anonymously in order to disguise his intentions.

The problem with writing a book about trading strategies or systems is that the markets are constantly changing, and trading systems become obsolete and must evolve over time. What doesn't change is the emotions and psychology of the people who compose the markets. The author states numerous times that trading is about 90 percent mental. While this is in fact correct, he then only briefly touches on the mental and psychological barriers that must be overcome in order to trade successfully. The best books on trading understand this, and are devoted almost totally to this subject.

There are also numerous inaccuracies. At one point, he details a month of trades from an "anonymous" daytrader who allegedly made 731 trades during the month, of which 377 were winners, with those trades averaging $93.03 profit. He then claims the trader netted $68,001.35 for the month. If you think about it for a minute, this is a mathematical impossibility. Also, he makes the typical mistake in believing a broadband connection is necessary to receive timely streaming quotations. Broadband speeds up downloads only with large size files. Streaming quotes do not fall into this category. I have timed my quotations against a T1 connection using an atomic clock accurate to 1 millionth of a second and have detected no difference. I do not use broadband, as it is not available in my area.

If in fact the author is a successful trader, it would have been much more productive for him to detail his own evolution as a trader, as well as the evolution of other specific successful traders he has known. This is the information that would be most useful to new traders. Unfortunately, the author only briefly discusses a few of his own trades, and gives no information whatsoever on the path he traveled to reach competence, assuming he has reached that level. It would also be interesting to see how he is trading in the post-bubble market, if in fact he is still trading successfully.

14 of 15 people found the following review helpful:

1.0 out of 5 stars Mismatch between Title, book description and content, January 5, 2004

By A Customer

I bought the book based on excellent reviews here and very attractive description.

However, I have been very disappointed because the content does not reflect the attractive title and description. The book is almost 100% for daytraders trading with level II screen. This is not said anywhere. "Online" does not mean exclusively daytrading to my opinion. It keeps on repeating "be disciplined" to fill space. One of the example of trade record given does not fit the explanation given in the text. For example, the trader made most of his profit in a single swing trade lasting several days whereas Nassar wants to show us that the guy is a good daytrader...

Another interesting thing: This book is not for beginners but it describes in fact very general basic rules... in a tough style that assumes that the reader already knows almost eveything.

When you read the table of contents, it looks great: how to enter, to exit, etc... but none of this is given in the book. No techniques are given.

Conclusion: This book could be fine if the description was fitting the content. It is for daytrader watching level II screen and who trade instinctively.

8 of 9 people found the following review helpful:

4.0 out of 5 stars Concise but covers +95% of rules I need to bear in mind, July 22, 2002

By	ServantofGod - See all my reviews (TOP 500 REVIEWER)

I am nobody in the universe of traders. However, I am confident that I belong to the top 5% of traders who "seriously" carry on self study for better results so I deem myself qualified to write such a title. (I keep on reading and I had even gone so far to get a CFA) I dont write this paragraph for self boasting. I just want to emphasize that the author really had delivered what is implied in the book title "Rules of the trade - indispensable ...".

Neatly structured, the book consists of 12 paragraphs, each of which about a specific topic, such as rules for the stock selection, rules for entering trades, rules for evaluating performances, rules for money and mind management, rules for this and rules for that...In the beginning of each chapter, related rules are listed.

In "the rules for exiting trades", to name a few: dont expect to squeeze all the juice from the orange; exit on reaction, not price; set mental stops; when in doubt, get out; know why you are in a trade, and where you will exit etc.

In the rules for active traders: size the trade; average winners, not losers; never let a winner turn into a loser; take profits often; never mix disciplines; dont fight the tape etc.

In the rules for the technician: day trade the range and swing trade the trends; always use indicators to confirm charts and patterns; dont make it rocket science, cause it aint; never ignore volume regardless of your trading style etc.

To me, this book is an easy read, well written but still can serve as a good reminder of things I know I need to remember but had somehow forgotten after intensive trading activities. Not a classic nor really insightful, but definitely good value for money!

p.s. The author had named 10 books of note in the Appendix. Four of them would be in my own list of top 10 recommendations. That might be the reason why I consider this book so readable.