The Universal Principles of Successful Trading: Essential Knowledge for All Traders in All Markets
The Universal Principles of Successful Trading clearly and unambiguously articulates trading principles that distinguish the winners from the losers. Though trading can be performed in different markets, across different timeframes, and with different instruments based upon different techniques, there is one common thread that ties all winning traders together: the universal principles of successful trading. All consistently profitable traders adhere to them regardless of the markets, timeframes, and techniques.
In this book, you will learn the foundations to successful trading. In time, you will discover that these principles are universal to all traders and all markets. Regardless what markets you trade—whether it be equities, indices, currencies, bonds, or commodities, regardless what time frame you monitor, whether it be day trading, short-term, medium-term, or long-term trading, and regardless which security you trade to gain an exposure to your preferred market—shares, CFDs, futures, forex, options, or warrants, trading is trading. Full stop. Which market, time frame, or instrument you choose is secondary to the process of good trading, which this book explores in depth through the universal principles of successful trading.
These principles will outline the essential steps I believe all successful traders must navigate before they place their first order. The principles will outline the importance of being process oriented in trading regardless whether one has a preference for discretionary or mechanical trading (in discretionary trading, a trader will make the final decision whether to trade; in mechanical trading, a trader must follow his or her trade plan’s exact entry, stop, and exit rules without fear or favor, without hesitation or discretion). The principles will take you through the nuts and bolts of practical trading covering key concepts such as risk of ruin, (my) Holy Grail, expectancy, opportunities, validation, TEST, money management, methodology, and psychology.
Chapter 8 on money management alone is worth the price of this book. Once you learn where I place the importance of money management, you’ll understand why it’s one of the largest chapters. I don’t believe you’ll find another book so accessible to the average reader (who isn’t armed with a Ph.D. in mathematics) that has such a breadth of examination and depth of practical investigation into various money management strategies.
Regardless of your trading experience, I believe all traders will benefit from the universal principles. They explore what is necessary to be prepared and well positioned to succeed.
Following the universal principles, you’ll meet a group of successful traders. I refer to them as the Market Masters, successful traders who are prepared to give you one piece of advice based upon their years of experience and success. Some of them you will recognize, while others you will not have heard of. Some are recent and current trading champions, the new young guns of trading. Some are market legends, the wise heads who have had a significant impact on the world of technical analysis and who have been trading the markets since the 1960s. One Market Master is possibly one of the largest individual E-Mini S&P500 traders in the world. Some are prolific authors and are the biggest names in trader education. Some trade investment funds. Some are private traders. They represent a diverse group of traders from around the world, from Singapore, Hong Kong, Italy, the U.K., America, and Australia. All of them are successful. All of them have survived the Global Financial Crisis. And all of them have generously agreed to offer you one singularly powerful piece of advice to help you toward your trading success.
By the end of this book, I hope you’ll have acquired the knowledge and confidence to consider whether you’re prepared to be involved in active trading. For many of you who are honest with yourselves, you will decide not to trade. You will determine that you don’t have the heart to put in the hard work necessary to prepare yourself for trading. If you are one of those, then congratulations because you will be saving yourself a lot of money and heartache.
- A Reality Check
- The Process of Trading
- Principle One: Preparat
- Principle Two: Enlightenment
- Principle Three: Trading Style
- Principle Four: Markets
- Principle Five: The Three Pillars
- Money Management
- Principle Six: Trading
- Just One Piece of Advice
- A Final Word