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My Book Reviews

Category: Trading psychology
Published: 2000
Read: 2002
Reviewed: Aug 2010

This book teaches traders how traders can use NLP (neuro-linguistic programming) to understand language and personal behavior in order to model a winning strategy. This is a fancy way of saying it is a book about psychology. The book explores key issues, like: motivation, the unconscious mind, emotional intelligence, language, and internal dialogue.

This book is not good at all. The author talks about both psychology and trading but doesn't seem to be an expert in either. He makes very few references to trading - and the references he does make are suspiciously vague, hinting at the possibility that he isn't intimately familiar with the issues he is talking about. When trying to apply a psychological concept to trading he'll make a very superficial reference, such as, "If you lost money on a trade then blah, blah, blah". These vague references don't have nearly the same value as the specific real-world examples you'll elsewhere. Hence, this book simply doesn't have the same feeling of authenticity compared to books written by the better authors of trading psychology, such as: Mark Douglas, Van K. Tharp, Ari Kiev, or Brett Steenbarger.

The author's stream-of-consciousness writing style causes him to skim over key issues. He introduces technical concepts without exploring them nearly enough for readers to understand them at all, such as: “sub-modalities, "anchors", "refrains", and "representation systems". There were also many well-known areas of psychology which were not explored much at all, such as personality types. Furthermore, all of his recommendations lack any kind of specificity. For example, he tells you to use affirmations, but he doesn't bother to give you a specific example of one to use.

One could argue that a more comprehensive exploration of the subject matter would only conflict with the book's ability to convey the overall themes. But these issues are so deep that a more comprehensive dialogue is warranted. I think the book could have retained its focus while also having depth. One could also argue that these are personal issues where readers need to come up with their own individual answers. But the subject matter is so abstract that most readers will need help in coming up with those answers.

Here are a few of the useful quotes and ideas that I did find in the book:

  • "The paradox is realizing that being in control is about letting go."
  • "Even if you give your investments to others to manage, you are wholly responsible for that decision."
  • Letting go of your ego doesn't create self-esteem. In order to trade soundly, you must lose your ego AND replace it with sound, prepared, professional judgment.
  • The conscious mind assembles the data. The unconscious mind notices the patterns, makes the connections and guide your judgment.
  • "The depth of your emotional resources is as important as your finances."
  • "The market is a collection of beliefs."
  • There is no content, only context.
  • "If we ever fought battles, the main opponent was ourselves."
  • "If you persistently adopt someone else's view, expect their performance. In that case, why don't you just put the money into one of the thousands of funds and crystallize your implicit delegation of responsibility."
  • When I was a stockbroker, someone once asked me "when is this market going to go up?". My reply was "when more people believe believe it will go down."

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