There is no ABC of trading

Where can I get a book on that?

One of the most curious things I come across when talking to new traders, is that they all have a very different idea of what trading is compared to the reality of what trading is. It comes back to the problem that everyone has when starting out. We simply don't know what we don't know. I am quite sure that this problem is largely due to the fact that people see a trading course with glossy advertising showing someone trading on a laptop, while sitting on the beach. Maybe they believe that they can come home after work and trade for a couple of hours and be successful. I am not saying that you can't do that but it has not been my experience that this is the case. Trading is hard work and takes a lot of time. One of the classics is when I tell people to have a look at my blog because everything that I do is on there and then we can have a talk. They ask me where they can get a book about it. I don't understand that way of thinking at all. It is like they expect there to be a book somewhere called 'The ABC of Trading'. Believe me, if it was possible to write such a book I would have done so. I learned to trade before the internet so all I had was books to learn from but there was not one book that I can point to that was particularly helpful. My experience came from reading a number of different books and putting that into practice. The problem was that what I read in the text books did not necessarily translate into a practical application when it came to actual trading. The reality is that I learned to trade just by getting in and doing it. I fell on my face more times than I care to tell you but that is just the price of admission into trading. The market will extract a tuition fee from you no matter how good you think you are. You will fail at some point in your early trading career and it will hurt, there is no avoiding it. People say to me that they have never experienced a severe draw-down on their account. My reply is simply that they have not been trading long enough. I had success in the early days of my trading career. This lead me to become over confident and resulted in me taking on far too much leverage. The risk/reward was against me and to make it worse I went from trading longer term to trying my hand at day trading. I woke up one day to the news that planes had been flown into both towers of the World Trade Centre. My whole life changed that day. My account that I had built over 10 years was wiped out. I cried for that whole day. I recovered from that disaster but the lesson has stayed with me. Its all about managing risk/reward. That was the most valuable lesson of all.