TITLE: Trading from Your Gut: How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader
AUTHOR: Curtis Faith
GENRE: Non-Fiction, Business, Investing, Trading
PUBLISHED: 2009
RATING: ★ ★ ★ ★ ☆
PURCHASE LINKS: Amazon
MOBILISM LINK: Here
Review: Curtis Faith's recent book, Trading from Your Gut, is particularly excellent. Which assessment flies in the face of complaints re the book's brevity -- and worse: that Curtis Faith fails to teach meaningful trading methodologies.
I disagree on all counts. Sure, at ~190 pages, the book seems brief but I prefer an author get to his or her point quickly, especially in non-fiction. Curtis Faith does precisely that. And, as it regards insights and methodologies, well, Faith is no Scrooge, which I detail below. I do quibble that the editor seems missing in action; too many typos creep into the text, Faith relies overly much on analogies (although I understand his reasons), and Faith devotes too many words to settle an old score with Michael Covel, which has no place in this book because its personal nature disrupts the book's narrative flow and offers no purpose to all readers.
That said, Faith writes simply and directly to the 80% of his readership who lack basic investing skills; the other, more experienced 20% still can glean insight from combining their experience with Faith's insights. For example...
Inexperienced traders commonly latch on to a particular trading guru's methods. These new traders often follow the guru's explanation for how to trade without bothering to build an internal rationale or model for why those methods will work. They follow the letter of the law without attempting to understand the spirit of the law. They attempt to learn the "what" but not the "why" for trading based on a particular method. The problem with this approach is that it is static: It can't adapt to changing markets. It also leaves no room for the gut. The best approach is to use each part of our brain for what it is best suited to. The left brain is good at building and understanding models for how the world of trading works, and the right brain is good at generating ideas and recognizing opportunities. This explains why master traders use their whole mind for trading. They prime their right brains with patterns that their left brains understand and categorize using carefully reasoned analysis.
Faith addresses the topic of tyro investors who focus monomaniacally to improve their skills, an important objective; whereas master traders seek to improve their aptitude, attitude, and talent, in addition to their skill set. An investor can understand the hows and whys, for example, and yet cannot pull the trigger.
Master traders are always ready to change their opinions and perspectives. They consistently look for the reasons why they are wrong instead of trying to prove themselves right. Master traders don't suffer from mental inertia. Mental inertia comes from the prime lesson that new learning is retained for later use. When you form an opinion, it takes some specific impetus to change that opinion. The stronger your opinion, the stronger the impetus required to change that opinion. So when you have an idea that the market is not good for buying, it takes considerable motivation to change that idea. When a trader decides to place a trade, it often takes considerable drive to change course and exit the trade...
The beauty and wonder of this book is its final ~75 pages. Curtis Faith shares one of his core set-ups, his rebound swing method, shows visually its set-up -- and then points out the precise bar that manifests as his entry signal. In essence, Faith's set-up is the double bottom (or top), and his entry is the second low (or high)... But that single, singular bar for the second low must conform to specific parameters.
Other investing books are available, most of which dedicate to a single purpose: pattern recognition / analysis, investor psychology, evaluating company fundamentals, etc; the method by which Curtis Faith shares his insights (in this book) is especially inspiring. Trading from Your Gut marries the analytical with the perceptual and adds into the mix the notion that aptitude + attitude + skill set + doing the hard thing = trust in yourself. Consistent investment success ensues.
Buy and read Trading from Your Gut to learn from Curtis Faith: a trading setup, an over-arching methodology... and how to achieve that elusive, but not illusive, goal of consistent investment success.
Reading...
