The Essentials of Trading : From the Basics to Building a Winning Strategy (Wiley Trading) (Hardcover)

by John Forman (Author) "In this chapter we define our topic, discuss recent developments in trading and what they mean for the individual, and get the reader ready for..." (more)
Key Phrases: biggest drawdown, system research journal, trading time frame, Trading Plan, Anduril Analytics, Activity Log (more...)

Editorial Reviews

Product Description
Praise for The ESSENTIALS OF TRADING

"This is the book I wish I had when I began a training program for new traders. John's familiarity with trading and traders is evident in this text. His incorporation of exercises and use of examples bring topics to life, maintaining the interest of even the most hyperactive traders."
—Brett N. Steenbarger, PhD, author of The Psychology of Trading

"The Essentials of Trading masterfully teaches the novice how to conceptualize, implement, and manage the important fundamentals that form the building blocks of successful trading. Because the book and its examples have been classroom tested at both the undergraduate and graduate levels, the pace of presentation is ideal for a full or partial classroom exposure to Internet-based trading. The book is highly recommended as a viable academic teaching tool, and equally so for the developing nonstudent practitioner."
—Dr. Gordon H. Dash Jr. Associate Professor of Finance, University of Rhode Island

"As the founder of a women's entrepreneurial networking organization, one of the most essential messages I relay to our members is the importance of understanding and managing their own personal and professional finances. John Forman's book is one that I highly recommend to all our members, because of its clear explanations and teaching style that will allow any novice to develop a solid understanding of the world of finance and investment trading."
—Sherry Thacker, President and Founder, WENS Inc.

"The Essentials of Trading is an excellent introductory book on the subject. It not only provides the critical know-how, it also manages to inspire the reader to take their first tentative steps into the trading arena. A joy to read."
—Paul Gould, Managing Director, trade2win.com Global Trading Community

"While trading has become more challenging, the tools have improved, and John Forman brings an up-to-date, insightful perspective on what is needed for traders of all backgrounds to absorb. With the bar having been raised for all market participants, The Essentials of Trading brings a fresh look, providing successful examples of the implements necessary to build a trading system and have confidence in your own work."
—Joel Marver, Chief Technical Analyst, IFR Division, Thomson Financial

From the Inside Flap
While trading may seem as easy as "buy low and sell high," the reality is far different. Ever-changing market trends can make for turbulent trading sessions, while lack of concentration can lead to costly mistakes.

With nearly twenty years of trading and investing experience in a wide array of markets, author John Forman knows what it takes to succeed in this arena, and with The Essentials of Trading, he shows you how.

Written for those just beginning their journey through the world of trading, this straightforward and accessible guide provides a base of knowledge and understanding from which you can develop trading methods, systems, and techniques that best suit your personality, situation, and financial objectives. Filled with in-depth insight and practical advice, The Essentials of Trading first takes you through the basics of placing a trade and understanding how markets work, and then progresses to the development of trading plans, the implementation of risk management, and the building of trading systems. Along the way, the use of exercises and examples brings these and other topics to life.

By following the proven principles outlined within these pages, you'll learn how to:

• Analyze the markets
• Execute, manage, and monitor trades
• Design, test, and compare trading systems
• Determine the best trading arena in which to operate
• Take your trading forward, beyond the basics
• And much more

Since there is not enough room here to go into detail on every subject put forward, additional resources for this book—posted on a dedicated Web site (www.andurilonline.com/book)—have been compiled to allow you to research specific topics of interest. This Web site also provides access to the support tools mentioned at various points in the text, as well as to the free companion workbook designed to complement this book.

While you don't need to be a financial genius to make it as a trader, you do need to be disciplined in your approach to the markets. With The Essentials of Trading by your side, you'll discover what it means to be a successful trader and how to put together an effective plan of action for your trading as a whole and on a transaction-by-transaction basis with a system.

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Product Details

• Hardcover: 300 pages
• Publisher: Wiley; 1 edition (April 21, 2006)
• Language: English
• ISBN-10: 047179063X
• ISBN-13: 978-0471790631
• Product Dimensions: 9.1 x 6.3 x 1.2 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars See all reviews (6 customer reviews)
• Amazon.com Sales Rank: #221,100 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

38 of 40 people found the following review helpful:

5.0 out of 5 stars An Essential Resource for Developing Traders, April 22, 2006

By	Brett Steenbarger (Naperville, IL USA) - See all my reviews (REAL NAME)

Rarely does a week go by in which someone in the trading world does not ask me to endorse their website, product, or publication. I politely decline 90% or more of the time. The sad truth is that many trading texts are written by individuals who are not truly experts in their domains. When I had the opportunity to review John Forman's book "The Essentials of Trading" prior to its release, I not only gave it my endorsement, but consented to write its Foreword. I would only do that for an author who knows his stuff and for a work that I am proud to be associated with.

What John has accomplished is, to my mind, the best general-purpose introduction to trading I have yet encountered. Having run a training program for aspiring professional traders at a proprietary trading firm, I know the questions that new traders ask and the lessons they need to learn. John has clearly addressed these in "The Essentials of Trading". He begins with trading mechanics: the nuts and bolts of executing and managing a trade. His discussion is accompanied by real examples, with screen shots of order tickets and trading screens. This is no academic, theoretical treatise, but a hands-on introduction to trading basics.

Later chapters take up the important topics of trading plans and risk management, followed by methods for analyzing markets and designing, testing, and optimizing trading systems. Once again, practical examples abound, with clear illustrations of actual markets, positions, and systems. A nice touch are the text boxes throughout the book highlighting key concepts. Many of these are comments from traders and the lessons they've learned.

Overall, I found John's writing to be clear and concise. He has served as content editor for the Trade2Win community site, and his writing experience shows. When I endorsed the book, I said that it was the text I wished I had when I started my training program. I stand by that comment: this is a great introduction to the trading world.

Are there weaknesses to the book? Those will depend on readers' interests. Two full chapters are devoted to trading systems, but only part of a chapter to technical analysis. Valuable insights regarding trading psychology are scattered through the text, but there is no dedicated chapter to the topic. Conversely, the bonus sample trading system included in the appendix is worth the price of the text alone, providing an illuminating example of a trading methodology.

In sum, I highly recommend "The Essentials of Trading" for new and developing traders. From execution to planning to risk management to market analysis, it covers the basics in a clear, engaging style.

12 of 14 people found the following review helpful:

5.0 out of 5 stars Designed for the Individual Trader, June 6, 2006

By	John Matlock "Gunny" (Winnemucca, NV) - See all my reviews (REAL NAME)

Trading in the stock, foreign exchange, or other markets used to be a game played only by the experts on Wall Street or at a minimum sitting in a brokers office watching the ticker go buy. News dissemination was slow and poor. All of this has changed. The web now allows everyone the world over instant access to the same information and instant access to on line trading.

This book starts with the very beginning, opening a trading account. From there he moves to the development of a trading plan and tracking that plan using the 'demo' or test account at an on-line traders. The development of a plan that suits your needs, your own level of risk. In describing how to create your own plan, he goes over the primary ways used by the pros to analyze markets: Fundamental, Quantitative or Technical Analysis. Strangely enough, he doesn't seem to have a favorite as most authors do.

On the whole, you couldn't ask for a better introductory to the subject.

8 of 9 people found the following review helpful:

5.0 out of 5 stars The Real Deal, May 4, 2006

By	Tom Wilson (Chicago, IL) - See all my reviews

This book realistically describes what you need to know and what you need to do to trade successfully. I would recommend it to all aspiring traders. It provides the knowledge base and perspective that good traders develop through years of experience. A great book for both new and established traders.