My Book Reviews

Another book in the same vein as Market Wizards, "Real People: Real Traders" carries 14 interviews with successful traders who are ordinary people, as opposed to famous super-traders.

This book is pretty weak. It spends too much time talking about the personal and family life of each trader. The only useful observation related to any of their personal lives was where someone pointed out that having kids is a roadblock to living the life of a trader. Trading requires a large tolerance for risk, and when traders have kids, they become much more risk-averse because they want more security.

The problem with this book is that it has the same feel as all the other interview-style Marker Wizards imitations. It simply asks each trader what indicators they use. The only interview I really liked was with Glenn Ring (I particularly liked his analogy about how making money in the markets is like milking a cow). There were a few random anecdotes which were valuable. Here are a few:

• Indicators are most valuable when they're at extremes.
• Single contract trading system results are misleading because they don't include any money management rules.
• Neal Dietz: "Big volume breakouts [because of news] are fine, but I do not like them as well as big volume breakouts that nobody can explain."
• "Funds do not want fantastic gains; they just want consistency."
• John Fritz: "An interesting and very important characteristic that physicists seem to have is an exceptionally strong connection to the real, physical world, since that is where they work. I think this leads to an unusual discipline where, after a brief initial disappointment, they are usually pleased to find out that a wonderful, beautiful idea they have is wrong."
• "I cook like I trade. I take a recipe, and then I'm creative around it." - Herb Drechsler
• Not only do you have to match your trading style to your personality, but you have to match your research style to your personality.
• Momentum precedes price. If the market is losing momentum, then you should expect the market to turn.