Van Tharp: Trade Your Way to Financial Freedom, Super Trader and Safe Strategies
Trader's Library #33 · Trading methods and craft. Trading as a system: expectancy, R and position sizing.
Author: Van K. Tharp · Original: Trade Your Way to Financial Freedom; Super Trader; Safe Strategies for Financial Freedom · Year: 1998 · Usefulness for traders: ★★★★☆
What it's about
Three books by a psychologist and trading coach. “Trade Your Way to Financial Freedom” teaches building your own system, “Super Trader” combines psychology with system work, and “Safe Strategies for Financial Freedom” is a more general book on personal finance.
What it gives a trader
Tharp's key ideas: express every trade's result as a multiple of the initial risk (R), judge a system by its expectancy rather than its win rate, and treat position sizing as a separate, crucial part of the system. Tharp also shows that the same entry signal can produce completely different results depending on exits and money management.
Lessons for traders
- the win rate doesn't decide the result; expectancy does
- measure results in units of risk (R), not in money
- a system has to fit your beliefs and goals
- overemphasising the entry is a beginner's mistake (the illusion of control, Atlas of biases #13)
What to watch out for
Lots of repetition and promotional material for the author's courses. The part on “beliefs” is close to coaching.
Discussion
The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →
Navigation
← #032 Futures and Options (John C. Hull) · Library index · #034 Long-Term Secrets to Short-Term Trading (Larry Williams) →
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.