Trade your way to financial freedom PDF

Trade your way to financial freedom PDF- Van Tharp

Trade your way to financial freedom PDF– Van Tharp will help you learn how to develop a trading system that fits your beliefs and helps you to achieve your objectives.

Category: Forex, Stock

Author: Van Tharp

tag: Van Tharp

Language: English

Download link: At the end of the post

E4T’s suggestion for you- Another’s Van Tharp’s book on E4T: Trading beyond the matrix


” I read this book and his other published book at the time, Financial Freedom through Electronic Day Trading. I took several more of Van’s workshops, and I adopted five key principles around which I built my firm. Four of those principles I learned from Van. I have kept the principles consistent and in the order Van teaches them as well. Here they are:

1. Psychology. You could have the best opportunities and resources in the world but if your psychology is flawed, you won’t make it. We operate on the belief that we create and manifest our own realities. If we think the world has problems, then we manifest those beliefs in what we see. But if we think the world is abundant, then we find lots of evidence to show that it is. We place the most amount of focus in this area from how we hire new employees to how we teach them and how we grow.
And in this new edition of Trade Your Way to Financial Freedom, you’ll find that principle throughout the book. You are responsible for the results you get, which means that you are in charge of your trading.
When you get results that you don’t like, you made a mistake in some way, and you can fix that mistake.

2. Position sizing. You could have the best trading plan, information, and execution systems, but if you bet too big, you’ll blow out. As Van points out in this new edition, a low-risk idea is an idea that’s traded at a risk level that allows you to survive the worst-case contingencies in the long term, so that you can achieve the long-term expectancy of the
system. This is one of the real keys to trading success, and you should read this book, several times, just to make sure that you understand this point. You are going to have losses, and it’s important to limit the damage of those losses to achieve optimal compounded returns.
Position sizing is one of the most important aspects of trading yet so few people teach it. It’s that part of your system that helps you achieve your objectives. Make sure you really let that sink in as you read
Trade your way to financial freedom PDF.

3. Market selection. This principle is my addition, although it’s part of Dr. Tharp’s model given in Chapter 4. The market you trade is far more important than how you trade. I’ve seen this principle operating throughout my trading career. In the late 1990s, early 2000s there were stock options guys making enormous amounts of money, yet they had no idea what they were doing. A few short years later, some of these same traders were approaching me for jobs as clerks with our firm. In contrast, I saw some great traders make a solid living slugging it out in bad markets. If they were in some of the busy markets, they would have been legends. This confirmed my belief. Find the busiest, most volatile markets and focus on those. As John Paul Getty used to say, “Go where the oil is!” I’m really glad to see that Dr. Tharp has added a chapter to this new edition on assessing the big picture, and then finding markets and strategies that fit the big picture.

4. Exits. The key to making money in the markets is in how you exit the market. You must limit your losses by knowing when you are wrong and pulling the trigger on your bad trades. This is discussed extensively in Chapter 10. You must also know how to manage a winner and let it optimally run. This is discussed extensively in Chapter 11.

Some of the greatest traders I know and have watched were masters at admitting they were wrong, exiting the position without ego, and doing it in a way that no one even knew they were getting out of the market.

5. Entries. In Chapter 9, you learn that you can enter the market randomly and still make money. Dr. Tharp even talks about his random entry system and shows you how to make money with it. If you have a sound psychology that allows you to trade without ego; a positive expectancy system, which is produced by making sure that your losses
are kept to a minimum (Van calls this “making sure your losses are 1R or less”), and trading for excellent reward-to-risk ratios (which Van calls “having your winners be large multiples of your initial risk”); and trade in the best market, using position sizing to meet your objectives, then your entry just isn’t that important. These principles are discussed throughout this new edition of Trade Your Way to Financial Freedom.

As I mentioned earlier, Trade Your Way to Financial Freedom is required reading for my new traders. It gives insight into all of Van’s other work that I have found so valuable. This book will help you learn how to develop a trading system that fits your beliefs and helps you to achieve your objectives. If you read it again and again, you’ll gain even more insight into the five key principles I use to run my company.

I would not have had the success and blessings I have had or had the opportunity to share them with so many others in the building of my firm if it had not been for the philosophies that Dr. Tharp taught me. I believe it was God’s plan that I ran into Dr. Tharp and had the chance to learn from him. I have seen these philosophies put to the test over and over again as I have built my firm. They are the principal reason my firm has become extremely successful.
I hope you too learn the wonderful lessons from this book and use them to trade more profitably and to live your life more purposefully.”
Chuck Whitman
Chief Executive Officer
Infinium Capital Management
Chicago, Illinois


First, I’d like to comment on the title, which includes the words “financial freedom” in it. Many people thought that the words “financial freedom” made the title a bit too commercial. Jack Schwager even wrote a comment on the first
edition that said, “While I can’t promise you financial freedom, I can promise you a book filled with sound trading advice and lots of ideas you can use to develop your
own trading methodology. And, if you don’t think that’s enough,
then you really need this book.”

CONTENTS- Trade your way to financial freedom PDF

Foreword by Chuck Whitman
Preface to the Second Edition
Preface to the First Edition

Chapter 1
The Legend of the Holy Grail
The Holy Grail Metaphor
What’s Really Important to Trading
Modeling Market Geniuses
Chapter 2
Judgmental Biases: Why Mastering the Markets Is So Difficult for Most People
Biases That Affect Trading System Development
Biases That Affect How You Test Trading Systems
Biases That Affect How You Trade Your System
Chapter 3
Setting Your Objectives
Designing Objectives: A Major Part of Your System Work
Tom Basso on Objectives
Setting Your Own Objectives

Chapter 4
Steps to Developing a System
1. Take an Inventory
2. Develop an Open Mind and Gather Market Information
3. Determine Your Mission and Your Objectives
4. Determine the Concept That You Want to Trade
5. Determine the Big Picture
6. Determine Your Time Frame for Trading
7. Determine the Essence of Your Trading and How You Can Objectively Measure It
8. Determine What Your Initial 1
R Risk Will Be
9. Add Your Profit-Taking Exits and Determine the
R-Multiple Distribution of Your System and Its Expectancy
10. Determine the Accuracy of Your
R-Multiple Distribution
11. Evaluate Your Overall System
12. Use Position Sizing to Meet Your Objectives
13. Determine How You Can Improve Your System
14. Mentally Plan for Your Worst-Case Scenario
Chapter 5
Selecting a Concept That Works
Trend Following
Fundamental Analysis
Value Trading
Band Trading
Seasonal Tendencies

Intermarket Analysis
There’s an Order to the Universe
Chapter 6
Trading Strategies That Fit the Big Picture
The Big Picture as I See It
Factor 1. The U.S. Debt Situation
Factor 2. The Secular Bear Market
Factor 3. The Globalization of Economic Factors
Factor 4. The Impact of Mutual Funds
Factor 5. Changes in Rules, Regulations, and Taxes
Factor 6. Human Beings’ Tendency to Play a Losing Economic Game
Other Areas You Might Consider
How Will You Monitor the Big Picture?
Chapter 7
Six Keys to a Great Trading System
The Snow Fight Metaphor
Looking at Expectancy under a Magnifying Glass
Opportunity and Expectancy
Prediction: A Deadly Trap
Real Trading Applications
Determining How Your System Will Perform

Chapter 8
Using Setups to Jumpstart Your System
The Five Phases of Entry
Setups for Stalking the Market
Filters versus Setups
Setups Used by Well-Known Systems
Chapter 9
Entry or Market Timing
Trying to Beat Random Entry
Common Entry Techniques
Designing Your Own Entry Signal
An Evaluation of Entry Used in Some Common Systems
Chapter 10
Knowing When to Fold ‘Em: How to Protect Your Capital
What Your Stop Does
Using a Stop That Makes Sense
Stops Used by Common Systems
Chapter 11
How to Take Profits
Purpose behind Profit-Taking Exits
Just Using Your Stop and a Profit Objective
Simplicity and Multiple Exits
What to Avoid
Exits Used by Common Systems


Chapter 12
There’s Money for Everyone
How Seven Traders Approach Their Craft
How Our Traders Would Look at Five Key Market Situations
Results Six Weeks Later
Results as
R Multiples
Chapter 13
Evaluating Your System
Several Approaches to Take
Expectunity: Factoring in Opportunity
The Cost-of-Trading Opportunity
Peak Drawdowns
Using Newsletter Recommendations as Sample Systems Summary
Chapter 14
Position Sizing—the Key to Meeting Your Objectives
Basic Position-Sizing Strategies
Model 1: One Unit per Fixed Amount of Money
Model 2: Equal Value Units for Stock Traders
Model 3: The Percent Risk Model
Model 4: The Percent Volatility Model
The Models Summarized Position Sizing Used by Other Systems

Chapter 15
Avoiding Mistakes
What’s Left Now: An Interview with Dr. Tharp
Recommended Readings

About author

In the unique arena of professional trading coaches and consultants, Dr. Tharp stands out as an international leader in the industry. Helping others become the best trader or investor that they can be has been his mission since 1982.

Dr. Tharp offers unique learning strategies, and his techniques for producing great traders are some of the most effective in the field.

Over the years, Dr. Tharp has helped people overcome problems in areas of system development and trading psychology, and success related issues such as self-sabotage. He is the founder and president of the Van Tharp Institute, dedicated to offering high-quality educational products and services for traders and investors around the globe.

While Dr. Tharp’s expertise is in the area of finance, his mission is to touch people in a way that changes them for the better. In his books, courses, and workshops, he uses the financial metaphor to do so.

Dr. Tharp uses a combination of skills and education to fine-tune his strategies to coach, consult and teach traders and investors. He received his Ph.D. in psychology from the University of Oklahoma Health Science Center in 1975. He is a certified Master Practitioner of Neuro-Linguistic Programming (NLP), a Certified Master Time Line Therapist, a certified Modeler of NLP, and an Assistant Trainer of NLP. He has used his expertise in NLP to create the successful models of trading and investing upon which so much of his work is based.

> Read more about Van Tharp and his books on E4T

Van Tharp

Download ebook Trade your way to financial freedom PDF (Second Edi.)


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