The amateurs miss the point This is not about the best stochastic settings or how to massage the bid and the ask This is about facing up to the very real risks inherent in the financial markets, including the very real risk of financial ruin Amateurs don t see the risk therefore, they don t bother to grapple with it Instead, they would rather blow up and disappear If one wants to last, he must come to terms with the nature of risk, his own tolerance for risk, an understanding of how to manage risk Without that, he s doomed.
Justin Mamis talks about risk and knows what he is talking about He describes different types of risk, like information risk or price risk You can have less price risk at the expense of information risk and vice versa.
The fact is you can never know everything about a particular stock or index You must base your trades on the information you currently have The longer you wait to gather information, the further the price moves away from a lower price risk point Now if you take a trade with low price risk, you are usually getting a higher level of information risk, because you may not have some pertinent information you may need or want Is that an issue Maybe Luckily the author speaks on the subject of understanding what the market is telling you and if its not good, get out.
The author talks about intuition He basically says you need to gather enough information to intuitively feel confident about taking or not taking the trade You cannot predict with perfect accuracy what the market is going to do But you can listen to what the market is telling you and then assess the risk and evaluate your trade.
The author writes in a way that really makes sense to me For instance in one section he talks about taking trades as compared to crossing the street There is risk when you cross at the corner with the traffic light There is risk when you cross in the middle of the block You have to determine your risk before you step off from the safety of the curb You also have to understand that standing on the curb is not as safe as you may think There is risk in everything we do You need to look at risk in a positive light Forget the dictionary meaning of risk as peril or danger Assess the risk and take the trade.
This is the first book I have read by this author I have read some of the reviews and they seem negative on it compared to the authors other two books,When to Sell Inside Strategies for Stock Market ProfitsandHow to Buy An Insider s Guide to Making Money in the Stock Market I was excited to hear that because I was halfway through this book and realized if his other two books are better, I have to have those too So I ordered them and look forward to reading them.
I believe this book should be on every successful traders short list of must read books.
Firstly, I have a lot of respect for Mamis, so this is NOT to run him or his writing style down.
In fact, I have given his other books, When to Buy and How to Sell the Five Star ratings as they are very useful and well written.
However, after reading those, this book seems to repeat some of the points made in them and seems a little defensive about Technical Analysis Avoid this one but positively buy the other two.
I was reluctant to buy this book based on the first reviews I read However, I have been daytrading for four years now, and frequently go against the crowd Perhaps it is this contrarian view that keeps me in this business I manage a proprietary firm in Denver Bright Trading and recommend this to ALL the new traders as well as veterans of the craft It is fresh, insightful and really gets to the meat of what makes one trader successful while another fails A great companion to this book is Mark Douglas book Trading In The Zone.
I can t put the book down Mr Mamis thoughts are unique and exquisitely thought provoking He is invaluable in illuminating the self examination necessary in my work as an investor, and my life as a man.
A favorite passage The risk can never be cured by knowing enough We need, we crave, trust and belief from others, and their acceptance, even though they really may not know us But when information is insufficient we need the trust and belief in ourselves, and the inner acceptance that we ll be okay anyhow We need the discipline to accept whatever is available We need the experience to understand all the ifs, ands and buts, and yet still confront the risk, and make the decision Setting ourselves free from the quest for information, oddly enough , is what reduces risk even as it appears from the freedom itself that risk is being scarily increased Oh my, freedom, that s dangerous Mr Mamis is one of my all time favorite writers.
g crossing the street he provides a very clever framework for making his point If this is indeed psycho babble, then I would state that it is psycho babble that you should read and understand if you are putting your dollars at risk.
Much of the market is counter intuitive to new investors I think that this book does a terrific job in highlighting WHY that is so One of the most helpful to me ideas in the book was the nature of information, price and time risk I ve never seen any book frame these important and oft expensive risks in such a way In fact, I would recommend that you buy the book SOLELY for your understanding these risks.
For example, Mamis states, At the moment of maximum information risk, the price risk is minimal and The information that comes along, the greater the price risk These seem on the face as superficial statements, but they really are not because of the emotion that comes along at these junctures that mutes the import of such perspicacious statements.
If this is psycho babble, then it is pscyho babble at its finest The book is written in an accessible, conversational tone It is like sitting in a comfortable chair with a drink or two and talking with an old friend from whom you will learn much.
This should be one of the first books that any trader reads I can understand why it isn t It doesn t have the mind blowing rags to riches power plots that attract the masses, nor does it tell you how to make millions of dollars in a short time by following a few easy steps which often seem to be accompanied by a pricey subscription or expensive software.
What it does have is priceless guidelines on how to think and beat natural instincts and social conditioning that are detractors from success when making trading and investment decisions I d like to give specific examples but it would be difficult to top dbphoenix s review.
So read his review if you need convincing, read the book, understand yourself better, and make money.
Sometimes The Biggest Risk Of All Is Taking One, And The Need To Be Sure You Are Making The Right Choice Actually Increases The Risk The Market Is Not Efficient And Hedging Doesn T Work To Rely On Charts To Understand The Market Is Mamis Way The Author Is An Excellent Market Technician Who Offers Sound Financial Guidance And Insights Into The Prepared Mind He Gets Your Thinking Going With A Comfortable Investment Philosphy That Will Often Go Against Convention There Are Enough Anecdotes, War Stories, And Charts To Make For Sound Advise The Path To Market Freedom Is Technique, And You Don T Have To Be One Of The Best Traders To Succeed With Experience It Seems To Me That The Entire S Have Confirmed The Ambiguities Of Market Language And How To Operate In Such A World You Will Know How To Keep Risk At Bay Which Most Of Us Find Not To Be An Easy Task Pages In a sentence, this book belabors the point you can t let yourself get paralyzed and you have to make a decision There s a few other technical gems touched on, but they are just passed by from the paralysis point I think it s good to read and learn, but not the best book overall Still worth a read.