Trader Vic I and II (Victor Sperandeo)
Trader's Library #31 · Trading methods and craft. A Wall Street master on trends, false breakouts and protecting capital.
Author: Victor Sperandeo · Original: Trader Vic: Methods of a Wall Street Master; Trader Vic II: Principles of Professional Speculation · Year: 1991 · Usefulness for traders: ★★★★☆
What it's about
Sperandeo, one of the interviewees in Schwager's “The New Market Wizards”, describes his method: Dow Theory, a definition of a trend change (the 1-2-3 rule and the 2B pattern, i.e. a failed break of a high or low), risk management and Austrian economics as the backdrop to the market cycle.
What it gives a trader
The 2B pattern – a false breakout – is something an intraday trader sees on the chart every day. Sperandeo also teaches that preserving capital is goal number one and profit only goal number two.
Lessons for traders
- protect capital first, profit second
- a failed break of a high or low is valuable information
- a trend has to be defined precisely, otherwise you see what you want to see (confirmation bias, Atlas of biases #21)
What to watch out for
The second part contains a lot of economics and politics. The examples come from the 1980s and 1990s.
Discussion
The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →
Navigation
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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.