From the June 01, 2012 issue of Futures Magazine • Subscribe!

The Trading Book: A Complete Solution to Mastering Technical Systems and Trading Psychology

Book Review

By Anne-Marie Baiynd
McGraw-Hill$35.00; 256 pages

Anne-Marie Baiynd provides beginning day traders and those who have had limited success with a complete day trading methodology that she has used to become a profitable trader.  Baiynd is a trading coach and mentor, as well as a former neuroscience researcher. She writes as if she were tutoring you one-on-one, and that works well in getting her points across. One of her key goals is to manage risk exposure, and she emphasizes that throughout the book.

One of the most noteworthy features of the book is the unvarnished truth about her previous trading failures, and how she overcame those by combining technical trading with patience, discipline and perseverance.  Her failures forced her to re-evaluate her methodology and then come up with an approach using specific rules that evaluate a market’s trend to identify high-probability entry and exit points.

To accomplish her goal, Baiynd developed a momentum-based technical trading approach using candlesticks that combine a handful of indicators: Two moving averages, support and resistance levels, channels, Fibonacci retracements and Bollinger Bands. In a step-by-step manner, she explains and illustrates how to assess a potential buy or sell signal on a stock. Using half-page chart examples, she methodically reviews each of the indicators using a case study approach for going both long and short, in two separate chapters.

Baiynd devotes a chapter to explaining the importance of creating and updating a personal trading journal.  She is a strong believer in reviewing every trade to ascertain the reason and timing of it, and whether all the trader’s rules were followed.  In particular, looking at the reason for past trading losses will help eliminate bad decision-making in the future. The author actually provides two devastating excerpts from her trading journal to show how her mind worked in making trading decisions, and how difficult trading is when one fails to adhere to the trading rules and setup parameters identified by prior analysis. In addition, a sample trading journal is provided that highlights premarket moves and economic releases, stocks to watch, market events, trends and aftermarket review.

Moreover, a mental action plan, coupled with not only a pre-trade 15 question checklist, but also a 32-question daily preparation list provides a very useful guide to making sure all the key elements of the potential trade are reviewed prior to putting on the trade. Other useful topics covered include the use of stops, understanding yourself, the importance of dedication, discipline and endurance, and mental and personal preparation. A glossary also is included.

In summary, Baiynd has written a highly readable, enjoyable and practical book that new day traders and those without previous success will find beneficial. Her simple and direct writing style, accompanied by personal experience and her expertise provide an actionable and pragmatic approach to day trading. 

Leslie N. Masonson is the author of Buy – DON’T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk and All About Market Timing.  Reach him at lesmasonson@yahoo.com

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