Cover image for Trade your way to financial freedom
Trade your way to financial freedom
Tharp, Van K.
Personal Author:
Publication Information:
New York : McGraw-Hill, 1999.
Physical Description:
xxiv, 343 pages : illustrations ; 24 cm
General Note:
"Dr. Van Tharp's secrets to: how to find the Holy Grail in the market and how to design a winning system that fits you."
Format :


Call Number
Material Type
Home Location
Item Holds
HG179 .T452 1999 Adult Non-Fiction Non-Fiction Area

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The steps found in this book can help your trading program. This book helps to get to the heart of what it takes to be a successful trader.

Author Notes

Van K. Tharp, Ph.D., has been a consultant to traders and investors for over 15 years and has studied over 4,000 traders during that time. He is internationally recognized as the number one psychologist and coach for traders and investors. Dr. Tharp is a sought-after speaker, developing courses and seminars for large banks and trading firms around the world. He is the author of a successful five-volume home study course, a test designed to evaluate a trader's strengths and weaknesses, eight different 3-day workshops, a monthly newsletter on systems and psychology, and numerous articles in industry publications.

Table of Contents

David Mobley, Sr.
Forewordp. xiii
Acknowledgementsp. xvii
Prefacep. xxi
Part 1 The Most Important Factor in your Success: You!
Chapter 1 The Legend of the Holy Grailp. 3
The Holy Grail Metaphorp. 6
What's Really Important to Tradingp. 9
Modeling Market Geniusesp. 11
Summaryp. 14
Chapter 2 Judgmental Biases: Why Mastering the Market Is So Difficult for Most Peoplep. 17
Biases That Affect Trading System Developmentp. 20
Biases That Affect How You Test Trading Systemsp. 35
Biases That Affect How You Trade Your Systemp. 38
Summaryp. 41
Chapter 3 Setting Your Objectivesp. 45
Designing Objectives Is a Major Part of Your System Workp. 47
Tom Basso on Objectivesp. 48
Setting Your Own Objectivesp. 57
Part 2 Conceptualization of your System
Chapter 4 Steps to Developing a Systemp. 61
1. Take an Inventoryp. 61
2. Develop an Open Mind and Gather Market Informationp. 63
3. Determine Your Objectivesp. 66
4. Determine Your Time Frame for Tradingp. 66
5. Determine the Best Historical Moves in That Time Frame and Notice What Those Moves Have in Commonp. 69
6. What's the Concept behind Those Moves and How Can You Objectively Measure Your Concept?p. 70
7. Add Your Stops and Transaction Costsp. 72
8. Add Your Profit-Exits and Determine Your Expectancyp. 73
9. Look for Huge Reward Tradesp. 74
10. Optimize with Position Sizingp. 76
11. Determine How You Can Improve Your Systemp. 77
12. Worst-Case Scenario--Mental Planningp. 78
Chapter 5 Selecting a Concept That Worksp. 81
Trend Followingp. 82
Fundamental Analysisp. 86
Seasonal Tendenciesp. 91
Spreadingp. 99
Arbitragep. 103
Neural Networksp. 110
There's an Order to the Universep. 120
Summary of Key Pointsp. 126
Chapter 6 Understanding Expectancy and Other Keys to Trading Successp. 130
The Six Keys to Investment Successp. 130
The Snow Fight Metaphorp. 133
Looking at Expectancy under a Magnifying Glassp. 137
Expectancy and R Multiplesp. 143
Expectancy Applied to the Marketp. 148
Using Expectancy to Evaluate Different Systemsp. 152
A Review of How to Use Expectancyp. 158
Part 3 Understanding the Key Parts of your System
Chapter 7 Using Setupsp. 165
The Four Phases of Entryp. 167
Setups for Stalking the Marketp. 172
Filters versus Setupsp. 179
Setups Used by Well-Known Systemsp. 184
Summary of Setupsp. 196
Chapter 8 Entry of Market Timingp. 198
Trying to Beat Random Entryp. 200
Common Entry Techniquesp. 202
Designing Your Own Entry Signalp. 220
An Evaluation of Entry Used in Some Common Systemsp. 224
Summaryp. 229
Chapter 9 Know When to Fold 'Em: How to Protect Your Capitalp. 233
What Your Stop Doesp. 235
Using a Stop That Makes Sensep. 243
Summary Preserving Capitalp. 248
Stops Used by Common Systemsp. 249
Chapter 10 How to Take Profitsp. 254
Purpose behind Profit-Taking Exitsp. 255
Just Using Your Stop and a Profit Objectivep. 263
Simplicity and Multiple Exitsp. 264
What to Avoidp. 265
Summaryp. 266
Exits Used by Common Systemsp. 266
Chapter 11 The Opportunity and Cost Factorsp. 270
Several Approaches to Takep. 270
Factoring in Opportunityp. 273
The Cost of Trading Opportunityp. 275
Summaryp. 278
Chapter 12 What Do You Mean Position Sizing? I Only Have $10,000 in My Account!p. 280
Position-Sizing Strategiesp. 284
Model 1 One Unit per Fixed Amount of Moneyp. 286
Model 2 Equal Value Units for Stock Tradersp. 290
Model 3 The Percent Risk Modelp. 292
Model 4 The Percent Volatility Modelp. 296
The Models Summarizedp. 298
Examples of the Impact of Position Sizingp. 300
Summaryp. 306
Position Sizing Used by Other Systemsp. 307
Chapter 13 Conclusion!p. 314
Appendix I Recommended Readingsp. 325
Appendix II Key Words Definedp. 328
Indexp. 337