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Thom:
I haven't read it yet but here is someones review on
the book.
The Real Holy Grail: Money Management Techniques
Of Top Traders
By Eddie Kwong
Published by M. Gordon Publishing
Pages: 137
List Price: $45.00
If you would like to buy this book, click here.
Reviewed by Jim Sweet
Ever risk too much on a single trade and lose a chunk
of your working capital? Or allowed a small loss to
get out of hand...to the extent that it almost wiped
you out?
If so, you've learned an easy lesson the hard way --
it is easier to lose money trading the markets than it
is to make it. However sharp your trading "edge,"
without proper risk control and money management --
you're doomed to fail.
Preservation of capital is is the name of the trading
game. And now along comes a book -- Eddie Kwong's The
Real Holy Grail: Money Management Techniques of Top
Traders -- that may finally drive this point home.
The theme of this new book is familiar -- winning
traders minimizing losses. But Kwong doesn't ask you
to take his word for it. He compiles a collection of
first-person accounts from some of the world's best
traders who share their money-management strategies.
Among the many familiar names included are Dave
Landry, Mark Boucher, Kevin Haggerty and Jeff Cooper.
Apart from introducing each chapter, Kwong lets the
traders do the talking. Each trader authors (or
co-authors) an aspect of risk control relevant to his
particular type of trading. And there is no
one-size-fits-all approach to risk control, either.
Day, swing and intermediate trading money-management
techniques are covered.
The book opens with an introduction on loss-control
basics, including the three basic approaches to
settings stops. Dave Landry picks up the thread in
Chapter 1 by explaining the concept of drawdown and
offering 17 general guidelines for long-term success.
A quick, yet sobering, story of "Three Not-So-Wise
Men" is a reminder of what can happen to those who
choose to ignore risk-control techniques.
Mark Boucher rounds out the overview in with "Three
Rules That Will Help You Become A Master Trader."
Interestingly, as part of Rule 2, "Consistency Is the
Key," he explains what he calls the smoke and mirrors
behind annualized returns.
Chapter 2 is a detailed discussion of stop-loss
placement, including:
Volatility based stops
Average True range (ATR) stops
Historical volatility (HV) based stops
Dollar-based stops
Pattern-based stops
Of particular interest to me were Landry's and
Boucher's position management and trailing-stop
techniques, made clearer with real-world charts and
examples.
In Chapter 3, money management techniques particular
to different time frames are discussed. Daytrading
stop-loss strategy is discussed in a Q&A format with
(separately) Jeff Cooper and Kevin Haggerty.
>From Haggerty: "Intraday trading requires tight stops
to be profitable. You are limited by the clock and the
daily range of your selected stock. Remember, a pure
daytrader goes home flat every day." He then gives
specific stop-loss techniques and examples that the
reader can put to use right away.
Swing Trader? Next up is Dave Landry explaining his
"Ten Tenets of Swing Trading," comprised mostly
(surprise!) of money-management rules. Loss control
and profit-taking for the intermediate-term trader
follows, with contributions from Mark Marder and Loren
Fleckenstein.
Special topics related to money management are
discussed next. Among these are:
Setting time stops
Handling volatile markets (with an appendix devoted to
the concept of volatility -- very informative!)
Pyramiding
Again, the liberal use of charts serves to emphasize
the technical aspect of money management and risk
control. This book has a definite technical feel to
it.
Kwong himself closes out the book with a chapter
sub-titled (tongue-in-cheek, presumably) "Five ways To
Prevent Yourself From Losing Your Mind While Trading".
The focus here is on developing the mindset and
discipline necessary to apply the the lessons learned
in throughout the book .
"The Real Holy Grail" is simply the most comprehensive
book on money management to date. Highly recommended.
--- thombek <thombek@xxxxxxx> wrote:
> I could use some wisdom on stop placement and money
> management. This book "The Real Holy Grail" seems to
> be about those subjects.....
>
> Before I buy it, has anyone read it and would like
> to share a strong opinion on if you found it
> worthwhile ???
>
>
>
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