A new trading book came out in December and I am continuing with my book reviews for traders in my book review series.
The Compleat Day Trader is written by Jake Bernstein and is a 2nd edition. Jake is a long time trader and educator and the book covers all types of trading from stocks, futures, forex and more. This book touches on basic trading ideas but in my opinion is a more advanced book and if you are looking for trading basics I would read something more suited to beginners.
Jake is an excellent writer and shares his thoughts well, in clear an consise manner that is easy to follow. Jake has a lot of trading experience and he has a no nonsense approach when it comes to trading. Many of Jakes views are different from what you will hear today in the trading educators arena. I like that he shares his opinion even when he disagrees with the crowd.
He shares checklists on what you need to get started (including what type of computer you should have and how much money to start with) and checklists on what you need to succeed in trading. Both of those lists are valuable and will be something any trader would be wise to write out or print and keep it in there trading area.
How Much Money To Start
I agree with many of his points however he states how much money a trader would be wise to have to get started and he says the more the better and at least more then 5,000. His reasoning is that a trader needs a cushion to absorb losses and losing streaks so they can survive longer in trading. He states that the chances of being a successful trader are great if you start with more money in your account.
I however have a completely different thought regarding how much money you need to start trading. This is probably because I started trading in Forex and in Forex you can open an account for $50 which I did. I am not sure of any other trading vehicle where you can start with so little money. I started with a $50 account because that is all I could afford at the time and it was great for me. Why?
Because I could learn without blowing a ton of money. In trading it takes a long time to get experience to be a successful trader. I would think that most traders will lose from the outset. So I think putting up limited funds in the beginning is a much better idea so that you have a great time to learn. Then when you have a track record of success then you can add more funds which increase your chances of making more money. It is important to understand that all traders have a learning curve that they must go through and while going through that stage money will be lost.
Jake also talks about testing and system statistics about how one performance rates when one action is taken and how performance is when another is taken. These numbers are interesting and shed some light on small tweaks to your trading systems. The data was useful but personally I don’t enjoy reading that kind of stuff because it is a bit too much for me to handle with my limited mental capacity. I mean my lack of number crunching that I am capable of doing. I am glad I don’t have to be good at math to be a trader.
Overall the Compleat Trader is a great book, that I feel is valuable and would be beneficial to any trader. The subject matter is well written and offers valuable trading advice and solutions. If you are trying to learn the basics I would recommend a lighter read. Also if you have a hard time with statistical data then you might want to get something a little bit more relaxed.
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