The Universal Principles of Successful Trading Essential Knowledge for All Traders in All Markets

by Penfold, Brent

• ISBN13: 9780470825808
• ISBN10: 0470825804
• Edition: 1st
• Format: Hardcover
• Copyright: 2010-07-26
• Publisher: Wiley

Summary

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 ground-breaking book from top trader, Brent Penfold, the reader will: Learn how to develop a trading plan Learn how to identify and create an effective methodology Discover successful money management strategies Understand trader psychologyAnd many more exciting trading and strategies secrets.Supporting the universal principles are rare interviews from a diverse group of successful traders. Some are the new young guns of trading and others are market legends who are trading just as actively today as they were over 50 years ago. They represent a diverse group of traders from the United Kingdom, America, Singapore, Hong Kong, Italy, and Australia. All of them have generously agreed to offer the reader one singularly powerful piece of advice to help them towards their trading goals. Each piece of advice emphasizes an essential element of the universal principles.This timely and exciting book from Brent Penfold has already garnered many accolades and looks set to become a modern-day classic.

Author Biography

Brent Penfold is a full time trader, author, educator and licensed advisor. He began his career in 1983 as an institutional dealer with Bank America and today specializes in trading forex and global indices. Brent is the author of the bestselling book Trading the SPI (Wiley 2005) and is profiled in John Atkinson's e-book The Stock Market Wizards of Australia. Brent publishes daily newsletters for active Forex and Index traders and is a popular and sought after international speaker who has presented to traders throughout the Asia Pacific region in Singapore, Hong Kong, Malaysia, Vietnam, Thailand, India, China, Australia, and New Zealand.
Brent is a licensed futures advisor (AFSL 225946) and holds a Master of Commerce (Finance) degree.

Table of Contents

Acknowledgments	p. xv
Preface	p. xvii
Foreword	p. xxi
Introduction	p. xxiii
A Reality Check	p. 1
Why Do 90 Percent of Traders Lose?	p. 3
Common Mistakes-Year One	p. 4
Common Mistakes-Year Two	p. 7
Common Mistakes-Year Three	p. 12
How to Join the 10 Percent Winners' Circle	p. 17
In Summary	p. 19
The Process of Trading	p. 21
The Process of Trading	p. 21
Principle One: Preparation	p. 25
Maximum Adversity	p. 25
Emotional Orientation	p. 27
Losing Game	p. 30
Random Markets	p. 30
Best Loser Wins	p. 31
Risk Management	p. 31
Trading Partner	p. 32
Financial Boundaries	p. 33
In Summary	p. 33
Principle Two: Enlightenment	p. 35
Avoiding Risk of Ruin	p. 35
Embracing Trading's Holy Grail	p. 43
Expectancy	p. 44
Opportunities	p. 49
Pursuing Simplicity	p. 51
Treading Where Most Fear	p. 52
Validation	p. 53
In Summary	p. 56
Principle Three: Trading Style	p. 59
Trading Mode	p. 59
Time Frames	p. 60
Choosing Your Trading Style	p. 60
Long-term Trend Trading	p. 64
Short-term Swing Trading	p. 67
Long-term Trend Trading Versus Short-term Swing Trading	p. 69
In Summary	p. 71
Principle Four: Markets	p. 73
Good Operational Risk Management Attributes	p. 73
Good Trading Attributes	p. 76
In Summary	p. 78
Principle Five: The Three Pillars	p. 79
Money Management	p. 79
Methodology	p. 80
Psychology	p. 80
Money Management	p. 81
Martingale Money Management	p. 82
Anti-Martingale Money Management	p. 82
Key Concepts	p. 84
History	p. 85
Anti-Martingale Money Management Strategies	p. 89
Trading Forex_Trader Using a Single Contract with No Money Management	p. 90
Forex_Trader Using Fixed-Risk Money Management	p. 90
Forex_Trader Using Fixed-Capital Money Management	p. 94
Forex_Trader Using Fixed-Ratio Money Management	p. 99
To Chase $18,000,000 in Profits or to Chase $1,500,000 in Profits, That is the Question	p. 102
Forex_Trader Using Fixed-Units Money Management	p. 106
Forex_Trader Using Williams Fixed-Risk Money Management	p. 112
Forex_Trader Using Fixed-Percentage Money Management	p. 116
Forex_Trader Using Fixed-Volatility Money Management	p. 121
Which Money Management Strategy to Choose?	p. 126
Trading Equity Momentum	p. 137
In Summary	p. 141
Methodology	p. 143
Discretionary or Mechanical Trading	p. 144
Creating a Methodology	p. 145
Trend Trading	p. 158
Not All Indicators are Bad	p. 189
But Don't Markets Change?	p. 191
Multiple Methodologies	p. 192
Basic Attributes of Winning Methodologies	p. 192
Example of a Winning Methodology-The Turtle Trading Strategy	p. 197
Example of an Objective Trend Tool	p. 199
Fibonacci: Fact or Fiction	p. 201
Placebo Traders	p. 209
In Summary	p. 213
Psychology	p. 217
The Consensus View	p. 218
Managing Hope	p. 220
Managing Greed	p. 221
Managing Fear	p. 222
Managing Pain	p. 223
Maximum Adversity	p. 228
In Summary	p. 229
Principle Six: Trading	p. 231
Putting it All Together	p. 231
Trading: Order Placement	p. 233
In Summary	p. 242
Just One Piece of Advice	p. 247
Balance	p. 247
The Market Masters	p. 248
Ramon Barros	p. 250
Mark D. Cook	p. 256
A Diverse Group of Traders	p. 260
Michael Cook	p. 262
Kevin Davey	p. 265
Tom DeMark	p. 267
Lee Gettess	p. 273
Daryl Guppy	p. 276
Richard Melki	p. 280
Geoff Morgan	p. 284
Gregory L. Morris	p. 290
Nick Radge	p. 292
Brian Schad	p. 295
Andrea Unger	p. 299
Larry Williams	p. 302
Dar Wong	p. 309
A Wealth of Advice	p. 312
A Final Word	p. 317
Risk-of-Ruin Simulator	p. 321
Simulator Variables	p. 321
Model Logic	p. 322
Simulator	p. 323
DIY Simulator	p. 323
Risk-of-Ruin Simulator	p. 325
DIY VBA Risk-of-Ruin Simulator	p. 325
VBA Code for Risk-of-Ruin Simulator	p. 326
Risk-of-Ruin Simulations	p. 331
Index	p. 333
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