on October 25, 2010
There is an expression, 'I'm sorry that this letter is so long. I didn't have time to shorten it'. In other words, good writing takes time to simplify. Good (or better yet, successful) trading also takes time to simplify. It is a familiar story; we spend years trying different systems, methods and structures. We accumulate dozens of different indicators and continually fiddle with their parameters. We keep searching for yet another way to trader's nirvana, only to find that the simplest and most direct route is the real path to follow.
Dave Landry uses only an occasional straight line and a simple moving average to find winning stocks, together with a straightforward money management approach. He trades only equities because he believes that these trend best. He happily describes himself as a `trend following moron' because his approach is self-regulating. If the market is trending up (or down), prospects present themselves. If it is ranging, he waits until it trends again.
Dave looks for a strongly trending stock with reasonably high volatility and an acceptable increase in price relative to the trending period. The trend should have been in place for about twenty days and be fairly persistent i.e. a straight line drawn through the trend should intersect all or most of the daily bars. The stock should have completed a pullback of two to seven bars and be resuming the trend. And that's the gist of it. There are a few wrinkles and some variations on this theme but they are all related to taking advantage of a strong trend, its pullbacks and entering on the trend resumption.
This is Dave's third book and each book provides this same basic message. His system works, it is simple and it gets results. His first book was one of the many that I read when I started trading some years ago. But like most traders, simplicity wasn't enough for me and I moved through the `more complexity is better' routine. I can recommend this book to those just starting out, as well as to the many that have been scratching unsuccessfully in the trading henhouse for some time.
on October 28, 2010
I started investing before most people who will read this book were even born. I have made good moves, bad moves, and moves I prefer not to talk about. A good friend suggested that I read The Layman's Guide To Trading Stocks. My reply was "I am hardly a layman, I have made and lost more money than anyone who would consider himself a layman." My friend said "just read it." I sat down with the book and could not stop reading. Every mistake I have made over the years is right there. Everything I did right is there. And Dave Landry puts it together in a coherent roadmap that could have helped me avoid the mistakes and capitalize on the good ideas every year since I invested my first dollar. The book definitely accomplishes its goal and more. The Layman's guide shows every investor how to avoid the pitfall of conventional thinking and capitalize on what really moves the markets. I highly recommend this book to anyone seeking an understanding of how markets really work, and what it will take to succeed as an investor.
on October 15, 2010
When Dave Landry began writing his third book, he set out to write what he thought was going to be a beginner's guide to trading, one for `the layman'. But that plan changed over time. Landry explains in the preface of the book: "As I watched more and more people lose money in one of the greatest bear markets in history, I felt compelled to add more and more information. The basic book that I had envisioned soon ballooned into much more." Indeed, Landry's finished product is a complete guide to not only his trading methodology, but to his attitude and philosophy on trading as well, suitable for the beginner and experienced trader alike.
The book is divided into two sections, labeled `First Steps' and `Taking The Next Step'. The first section is, as the name implies, geared toward the beginning or novice trader. But right from the start, the book goes beyond the initial steps of helping one to recognize good trading opportunities in Landry's trend-following/pullback style, and helps the reader to `think' like a trader, first by trying to dispel some of the well-entrenched Wall Street myths, and then later by delving into trading psychology. That psychology is, in my opinion, one of Landry's strong suits, and one that many technical traders tend to either gloss over or ignore completely.
Often, traders of all types emphasize the methods, but overlook the importance of psychology in trading. If you follow Dave Landry's work at all, you know that psychology is always part of the discussion, and that a big part of becoming a successful trader is learning how to keep your head on straight and your emotions in check -- and dealing with the fact that the market is going to smack you around now and then. You can count on Landry to help you out a great deal in that area.
In the chapters where he uses charts to demonstrate his trading methods, he keeps the number of examples to a minimum, rather than filling the pages of the book with chart after chart showing the same setup over and over again. He also wastes little time in getting to important topics like money management and position sizing, and stresses the use of protective stops, all of which should be a fundamental part of any trading method. When it comes to placing stops ("as much art as science", according to Landry), many trading books are more than willing to talk about which stocks to buy and what chart patterns to look for, but the idea of setting stops and planning an eventual exit from the position is often saved for a quick mention near the end of the book, or is neglected entirely. Landry makes it an integral part of the trading process.
In the second section of the book, called "Taking The Next Step", Landry details the `bottom up' process he uses to select the best trading opportunities for his methodology, in addition to describing a few more chart patterns, adding to the pullbacks described in the first section. The psychological aspects of trading are not ignored in this section of the book either, as he explains how one needs to avoid `micromanaging' their positions, and trust the methodology rather than sweating over every tick in the market. This section also contains a chapter on `discretionary' techniques to be applied in certain situations, e.g., trading `opening gap reversals', doing `damage control' when required, and `surviving a nick' on stops.
Landry wraps up the book in fine fashion, with a wire-to-wire example of a real-life trade. This follows a single trade from entry to exit, complete with the determination of the appropriate position size prior to entry. The trade is then followed step-by-step, showing how stops were adjusted as the stock moved, when partial profits were taken, and when it was time to finally exit the position completely. If the reader has any questions about how the method is supposed to work by the time he/she gets to this point in the book, this complete example should help clear things up!
Faithful followers of Landry's teachings (commentary, webinars, etc.) may, at first, be a tad bit disappointed that there isn't a lot of `new' material in this book, but I was quite impressed to see so much good information contained in a single volume. Having this book on your bookshelf might be the next best thing to having Dave sitting right next to you, ready to help you out with that question on trend qualifiers -- or maybe tapping you on the shoulder and telling you that you're `micromanaging' that position...
"The Layman's Guide To Trading Stocks" contains a wealth of information which should be helpful to traders of any discipline or experience level. If you told me today that I could only take one trading book with me to that desert island, this would be the one.
Well done, Dave.
on November 17, 2012
I like what Dave has to say. It's intensely practical, with no pages wasted on theorizing or filler. I especially like the mind-bending Pop Quiz on page 66. I even defended 'The Layman's Guide" in the 1-star review by Lew Marks.
However... have you tried to implement Dave's methodology?
1) Run a weekly filter of the entire market by price, average volume and historical volatility.
2) Sort by volatility and check the charts for possible trades, including clean trends or transitions.
3) Flip through the sorted list daily, flagging prospects to a sub-list (Landry 100)
4) Run pullback scan on the entire market, sort by historical volatility, examine the results and flag prospects to the Landry 100 list
5) Check back in time to ensure that the trends are valid
6) Overlay the Morningstar sub-sector to validate the trend
7) Focus on any sector that has potential and check the other stock in it for possibilities
8) Check any IPO that is 50+ day old
9) Check ETFs for possible setups
10) Boil down the Landry 100 to a shorter list for closer scrutiny
After all that, you still have to make some decisions and place your orders.
These methods are all clearly described and could very well be valid means to more successful trading. My problem is the TIME it takes to accomplish all this. If you have a day job and a Real Life, you won't be able to do it all. Dave has been doing this for decades and has a trained eye to cover the hundreds of charts he looks at every day. I can't do it that fast.
Please, Dave, give us laymen a break. Can you possibly provide a few shortcuts so that we can employ winning aspects of your methodology in 2-3 hours a day? I would appreciate it very much.
on April 6, 2011
This is an excellent book for someone starting out in trading stocks from a trend following point of view. As I'm in the third year of the 'game' and have read a fair num,ber of books on the subject, it was a bit basic for me, but everything Landry says is very sound and hype-free. Moreover, it's never a bad thing to be reminded of the basics. My one beef with the book is the price. For what you get in terms of quantity of material, the price is excessive. I would recommend this as a first book for someone new to trend following, or someone who is confused and losing money. However, for my money, by far the best book for a newbie is the one by Stan Weinstein. It's more comprehensive than this one and is a real steal for the price. One final point: this is not a book if you're looking to daytrade. The author deals in longer timeframes.
on June 23, 2011
This book is a good book for trading stocks especially for swing trading. His methodly is sound and works. I recommend using his book along with his website as many times you will get additional clarification on his methods. I've been trading stocks for many years and this is a good (and simple) approach to the stock market. This method does work well if you use a disciplined approach.Worth the read!
on January 26, 2011
Good Book IMHO- Landry brings the trader and would-be trader back to the essential- Learn price action- and forget the exotic TA indicators and oscillators, since they all lag price anyways. This book is for Swing traders- those wanting to hold a position for weeks, maybe months. It is a great book for both the beginning novice trader, and also the would -be TA trader that tries to rely on the right combination of stochastic, RSI, and macd to determine to get into a trade....Forget that.
No great "Holy Grail" method to approaching the market- Simply a better way of approaching a lower risk trending market.
After 10+ years of trading, and gradually modifying and simplifying my approach,and a number of other books, Landry's book strikes me as the one book I wish I had started with and then returned to after looking for some other exotic methodology .
He teaches a straight forward approach focusing on the basics- something newer traders need to learn, and more experienced traders should revisit. He includes some basic entry timing signals.
He covers a lot of territory, including when to take some profits, how to set stops, and basic money management-position sizing and Risk. I wish he had developed those chapters in larger detail,, but in total- the book itself sets a good groundwork for technical trading and the study of price action. "Value investors" should also gain from his approach.
on August 24, 2012
Dave Landry is known for his simple hand drawn arrows as his "sophisticated enough" principle chart indicator. In his Layman's Guide he makes it clear why. The road to fortune is that way --->: Prices when clearly moving in what ever direction that may be. Go against the arrow and odds are you get to experience what "Sailor Dunc" does when he ignores the arrow of his wind vane way atop his masthead. The result for his boat, like your trading account is not pretty.
In this work Landry puts forward an intriguing approach worth studying: Enter with a trend on signals of at least a good probability swing trade. At this stage your target is modest and stop tight. If it blows past your swing target shrink your position size, loosen up your trailing stop and run the remainder of your position out to its full trend potential.
His ultimate entry points are into PULL BACKS of young or established trends. Ones that have held and show convincing signs of resuming in the original direction. Even if the original trend fails to fully recover you have the odds of at least a nice little swing rally as the market tests and tugs which way to go.
There is nothing revolutionary about these "simple" pull-back set-ups: they are classic trend and swing favorites. However in trading simple does not = easy. Many mistaken entries and not so happy outcomes lie ahead, like so many rocky reefs. There is no sure thing. Landry's takes on how to select and navigate makes this a worthy contribution.
Riding with trends makes sense, and Landry helps point the way. However expecting a "free ride" of both a high win percent AND a high reward to risk ratio will set one up for bitter disappointment. Landry's system, like most trend following (if not trading in general) is predicated on little contained, but common losses being more than compensated by steady enough small wins AND occasional large ones let run to most of their potential. To buck-up realistically for the inevitable PAIN along the way, a complimentary read would be the wise and entertainingly blunt "Universal Principles of Successful Trading" by Brent Penfold.
Of course Landry's Guide covers more than the issues touched here. It attempts to be an overall guide to survivable trading practice.
One last point. The daunting PRICE of a Landry book can make one wonder if they are being taken to the cleaners. The skinny Layman's Guide, with lots of white space, has a price/word ratio that is up there. However I look at it this way. Many in the frothy industry marketed at traders get books out there cheaply, using them like hooks on fishing lines. Their books are adverts to reel in nibblers for their Services. Be it coaching, subscriptions, miracle software or what ever. Landry to be sure has much out there beyond the books. But he does NOT price and use them as the lip of the funnel. In a sense he stands that common practice on it's head. On YouTube at least you will find HOURS of absolutely FREE Landry explaining his approach with uninhibited detail and generosity. Owning the Layman's Guide would be the way to get the most of his webcasts. More than that, in buying it we make a small contribution to support and encourage the existence of such free resources. Now that's a refreshing approach worth investing in.
I am NOT won over on ALL the Guide's details. However there is much hard won common sense here. The du-gee simplicity of the basic concepts compared to multi-volume tombs (that fail to add much with their layers of verbiage, massive hodge podge of doggey indicators, macho hero worship, and pop pyscho-babble) is an amusing delight. The arrow points clearly at the BUY button. Sail On!
on October 15, 2010
When you're finally fed up with trying to trade off of MACD cross overs,
Stochastic over bought and over sold signals, PPO, Williams %R, Derivative
Oscillators, AROON up and down, ADX and all the rest. When you're sick of your
charts becoming so small you can't read them because your technical indicators
have overrun your screen space. When the economists on CNBC sound like drunken
godfathers making an offer you can't understand and you're finally sick and
tired of seeing your statements showing more losses than a Taliban soccer team
- then it's time to read Dave Landry's The Layman's Guide to Trading Stocks.
Why? Because price is what matters, and risk management, and patience, and the
fact that markets move in trends that go up and down and sideways. And if you
want to learn how to make money and have the chance to compound profits over
time while managing your risk, then you must learn to recognize when these
trends present themselves. You must learn that stocks are influenced by their
sectors and the general trend of the broad averages. You must learn that there
is no such thing as prediction or a holy grail indicator combination and that
all indicators are lagging and can only tell you what you could've and should've
done on the left side of the chart! Dave Landry patiently walks you through the
steps necessary to increase the odds in your favor of making a successful
trade. He then provides numerous examples of how to recognize price action that
consistently leads to actionable high probability entry signals and combines
risk management to allow you to follow the sage advice of the greatest traders
who ever lived: "cut your losses short and let your profits run". Hey, read
Livermore, read Darvas, read Sperandeo, Weinstein and Schwager, but start
with Landry. And while you're at it, pick up his other book 10 Best Swing
Trading Patterns and Strategies. If you intend to trade seriously you really
can't pass up the opportunity.
Respectfully from a trend following moron apprentice,
on April 7, 2011
Over the last 2 years I've bought a good number of trading books, many of them very highly rated. Dave Landry's "Layman's Guide...." is the first one I have been able to complete cover to cover. And I plan on several re-reads. Also, this is the first trading book that I am aware of that actually provides free webinar support.
Dave Landry has an amazing talent to communicate clearly and to the point, and what he has to communicate is very valuable in terms of trading knowledge and perspective. I have already benefitted from it, and expect to continue to profit from it as I re-read and digest its many nuggets of experience-laden information and advice.
Also, Dave presents information and knowledge in a refreshingly open way. Though he has an advisory service, it doesn't come across that this influenced the way he wrote the book. He doesn't mind sharing information, just for the sake of being helpful. Wow, what a concept!
Now no single book can cover everything about trading. It just doesn't work that way. And no single book can appeal equally to people of every level of trading experience and training. The best a book can do, as I see it, is to fulfill its self defined mission. And this is what "The Layman's Guide to Trading Stocks," has accomplished. I'm a relatively new layman trader, and I was stopped in my tracks by reading this book. It actually did what is said it was going to do. This book is an extremely useful and accessible guide to trading, and its common sense grounded and practical-to-the-point-of- being artful style leaves most other trading books in the dust. Thanks Dave Landry for opening up a door to the goal of becoming a successful trader.