One Great Book

One Good Trade is in a word, unique.  Rather than merely teaching a trading principle, Bellafiore takes the more entertaining, illustrative route by sharing stories of traders who exhibited particular characteristic traits or fell prey to certain trading pitfalls.  He was able to draw on his years of experience in the prop trading industry and share numerous personal experiences with both successful and not so successful traders.  I loved the storytelling and found the entire book to be a treasure trove of insight.

Following are a few of my favorite passages:

“Predictions absent validation from the price action are not advisable if you wish to enjoy a long intraday trading career.”

As traders we should all be obsessed with validation.  Why place a trade if the price action isn’t confirming your bias?

“There is no shame in failing as a trader.  The real shame is never trying if trading is your passion.  If you are passionate about trading and you never give it a run, then you will live your life wondering what could have been.”

I’m reminded of Oliver Wendell Holmes thoughtful statement, “Many people die with their music still in them.  Too often it is because they are always getting ready to live.  Before they know it, time runs out.”  If you want to be a successful trader the only one standing in your way is you.  Since there is virtually no barrier to entry anyone can start to acquire experience in the financial markets. No excess cash right now? No problem.  Just paper trade.

“To last in this business you must reinvent yourself, tweak your profitable setups, and embrace the mindset of change.  This is the life of a trader…. Even after becoming a consistently profitable trader, you will have to tweak your system.”

The market mandates flexibility.  Unfortunately we can’t just use the same set of trading rules in perpetuity.  Those unwilling to tinker with their plan will either fail to be as profitable as they could be or needlessly lose more money than they should.

Thanks to Mike for giving us all a revealing glimpse of the intriguing world of Prop Trading.