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CITATION

Tharp, Van. Trade Your Way to Financial Freedom. McGraw-Hill, 2006.

Trade Your Way to Financial Freedom

Authors: Van Tharp

Published:  December 2006

eISBN: 9780071658133 0071658130 | ISBN: 9780071478717
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  • Contents
  • Foreword
  • Preface to the Second Edition
  • Preface to the First Edition
  • Acknowledgments
  • Part One: The Most Important Factor in Your Success: You!
  • 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
  • Summary
  • Chapter 3 Setting Your Objectives
  • Designing Objectives: A Major Part of Your System Work
  • Tom Basso on Objectives
  • Setting Your Own Objectives
  • Part Two: Conceptualizing Your System
  • 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 1R 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
  • Spreading
  • Arbitrage
  • Intermarket Analysis
  • There’s an Order to the Universe
  • Summary
  • 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?
  • Summary
  • 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
  • Summary
  • Part Three: Understanding the Key Parts of Your System
  • 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
  • Summary
  • 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
  • Summary
  • 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
  • Summary
  • 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
  • Summary
  • Part Four: Putting it All Together
  • 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
  • Summary
  • 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
  • Summary
  • Chapter 15 Conclusion
  • Avoiding Mistakes
  • What’s Left Now: An Interview with Dr. Tharp
  • Glossary
  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • L
  • M
  • N
  • O
  • P
  • R
  • S
  • T
  • U
  • V
  • Recommended Readings
  • Index