The preface at the beginning of this book really spur my interest on this book. The author was inspired by the movie of "The Matrix". As a result, we got this so called "red pills" for traders and investors instead of "blue pills" as seen in the said movie. I love the said movie so much, although I admit that I am still very confused over the amazing contents. But, those days, the "red pills" did inspired me...
Ended up, this book caught me in different mix feeling throughout the journey of digesting it. First of all... the famous SQN as mentioned umpteen times in the book puzzled me more rather than strengthen my belief that a simple statistic like SQN actually works in real life. In my humble opinion, SQN alone is too predictive. A statistical stuff alone are just a guide and there is no way to prove a system workable unless it can performs regardless of the products, regional and any circumstances. The contradict part of it are the author's belief that we need to adjust different set of mechanical trading system for different markets or products. So, the predictive element is actually strengthen in a way that we need to "predict" the robustness of a system and we need to "predict" whether such system workable in a particular market. To me, I rather believe that products will change every single moments. Hence, the more a system adapts to different circumstances (regardless of products and regional issue), the more robustness it should be. If that is the case, is there a need to prepare different systems for different products?
Secondly, the author mentioned that: "The biggest mistake people make is to try to design one system to fit all markets." Well, I am not too sure about this. I would prefer to filter out the products while maintaining "one" system for the remaining products that I choose. As mentioned above, the more a system able to react to any circumstances, the more robustness it can be. Of course, we may not be able to apply "one" system to all products in general as the results may vary significantly. However, we have the choice to choose which products (with high profitable returns) to trade and which products to trade off. Again, it is all about "prediction" if we try to choose particular system for particular products. The contradict part arise when the author himself admit that: "If prediction has nothing to do with trading well, what do we try to achieve when we open a positions? It seems to be prediction." Sounds contradict, right?
Apart from the above two points, I actually like this book so much. The chapter on "My Inner Guidance" was surprisingly good even though I never believe in god. The author's relationship with Mitzi especially caught my mind as now I believe we really becomes who we are thanks to our grown up process. This brings up to a very excellent opinion from author at the earlier part of the book: "Every part is established with a positive intention, quite often to protect you from something, but you tend to forget about each part once it is established, as well as its intention. Consequently, a fear part designed to protect you from fear actually ends up bringing up fear all the time and producing fear in your life. One of the things you need to do to resolve the conflict is to go back to the part's original intention and give it positive things to do." As far as I am concern, god does not exist, But, the belief of positive thinking and raising our consciousness are so important to human beings like you and me.
Overall, this is an excellent book for traders. In general, all psychology stuff presented will surely help traders overcome lots of hurdles and tough moments in the cruel world of trading. The best part... the author provided cases of studies with successful traders sharing their journey with the readers throughout the whole book. Moreover, a UK friend of mine mentioned that the only way to get Van Tharp's psychology stuff is to attend his expensive courses. Now, it is all here in this tiny book (To me, any book less than 300 pages are consider not thick).
As a conclusion, I highly recommend this book even though there are certain points that does not sounds appealing to me as mentioned above. For a full rating of 10, I am going to rate this book at 8. This book further enhance my belief towards a better trader as well as a better and happy person.
Lastly, listed below are three excellent quotes that I think will be useful for my future references:
Entry by itself is relatively unimportant. Entry with your initial stop-loss is very important in setting up what 1R means.
Anything is possible. But, trying to be right is a sure path to disaster because of the psychological issues involved, and trying to predict is a path to disaster because, in my opinion, no one can really do it.
How do you think you'd perform as a trader if you were feeling "guilt", "shame", "fear", "grief", "anger" or any of the other lower emotions? It should be clear that you wouldn't do that well. You need to be at a minimum level of "acceptance" to expect to have much chance of successfully trading the markets.
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