The Universal Principles of Successful Trading (Brent Penfold)

Trader's Library #37 · Trading methods and craft. A list of principles shared by successful traders, with an important chapter on the risk of ruin.

Author: Brent Penfold · Original: The Universal Principles of Successful Trading · Year: 2010 · Usefulness for traders: ★★★★☆

What it's about

An Australian trader collects the principles he believes all successful traders share, regardless of market and style: preparation, risk management, method, execution and psychology.

What it gives a trader

A concrete, well-organised book. Especially valuable is the chapter on the risk of ruin (the probability of losing your capital given a win rate, payoff ratio and risk per trade), and the point that trading is simple but not easy.

Lessons for traders

• avoid the risk of ruin: survival is the precondition for everything
• the method matters less than risk management and execution
• trading is a business with costs, a plan and performance reviews
• don't confuse simple with easy (the Dunning-Kruger effect, Atlas of biases #15)

What to watch out for

Anyone who has read Elder and Schwager will know many of the principles. The value is in how they're organised.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #036 Way of the Turtle and Trading from Your Gut (Curtis Faith) · Library index · #038 Day Trading (Joe Ross) →

Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.