Mastering the Trade
04/01/2006 12:00 am EST
In Mastering the Trade by John F. Carter, I feel there is something valuable for every type of trader, from one who is just considering trading, to the experienced trader or analyst who wants to explore new ideas. As one who has quite a few books on trading and technical analysis, this is one you should have on your bookshelf.
If you are a novice trader and are not sure whether you need this book, stop by your local book store and read the first chapter. If you don?t feel you can relate to the experiences of John's "Joe Trader," you are not honest enough with yourself to be trading at all. Every analyst, trader, fund manager, or conference attendee that I have met in the past 25 years, myself included, has had that type of experience, at least once.
Most traders do not spend enough time on the psychology of trading. John, like many I know, learned a lot from Mark Douglas's excellent books on trading psychology, which he discusses in the second chapter. Reading this chapter should make every trader think differently about their recent trading mistakes. For those stock traders who have wondered about trading futures or Forex, he gives some practical information, as well as seasoned advice.
If you're looking for new setups (or don?t know what a setup is), Carter spends several chapters giving precise trade setups with well defined exit and entry points. Those making consistent returns that satisfy their expectations probably won?t need these chapters, but the rest of us will find them useful. These are techniques that you can immediately apply to the markets, but as John mentions regularly, discipline will be your key to success.
So which were my favorite chapters? In a book with 21 chapters, that is always a tough question. Nevertheless, I do have my favorites. These would include the description of the tools one can use to determine the stock market?s intra-day direction (Chapter 5), as well as his interesting application of pivot points (Chapter 7). For many years, I have found the use of pivot points to be a very valuable tool, and I found John's specific trading methods, based on the pivot point analysis, to be very thought-provoking. Also, as one who has preached for many years about the valuable information gained from monthly and weekly charts, I found Carter gives this approach more credibility with his perspective as a successful, short-term trader (Chapter 18). He concludes with several chapters on practical topics including why a pre-market checklist is important, and the realities of trading as a business. I feel confident that if you get this book, you?ll still look to it for guidance in the years to come.