Trading is running a business ?

Just been reading "How to get Rich" by Felix Dennis. It's more an autobiography of how he got rich (he's owner of Dennis Publishing - computer mags eg "Computer Shopper") and he is rich.

The interesting points are the parallels between his business career and what we experience as traders. He suffers (and with experience later corrects) all the usual psychological flaws that we have to fight, eg indecision / not sticking to the plan / letting losses run / poor money management. He also had to go through the learning "experience" before maturing as a businessman (trader).

This is a guy who has made a lot and blown a lot and there is possibly a bit of all of us in him. Definitely recommended as a read even if only to convince yourself that you are not the only person who makes mistakes but with experience can overcome them. I saw it as £7 paperback but borrowed it from the public library (money management). Can read it in a few hours.

PS - first heard of him recently on Radio 4 "Desert Island discs" where he also explains his poetry - could this be the ultimate de-stressing influence?

I agree with that, it's not only a super read, but he also comes across as a very nice person with his head screwed on straight.

Btw, if you like books like that another equally fantastic read is Bransons Losing My Virginity: How I've Survived, Had Fun, and Made a Fortune Doing Business My Way

0007 said:

This is a guy who has made a lot and blown a lot and there is possibly a bit of all of us in him.

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Interesting the number of star traders I see who have blown up. Are there any that haven't or is it as I suspect something that comes with the territory of being a risk taker.

Hoggums said:

Interesting the number of star traders I see who have blown up. Are there any that haven't or is it as I suspect something that comes with the territory of being a risk taker.

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I've wondered how many "star traders" are star traders. Out of every bunch, normal variation would leave some people with extreme returns, simply out of luck. They get the huge bonus and their face ont he front of a mag, only for the same luck to bring about a blow out at a leter date.

I've wondered this about the captains of industry too. For each one, how many have gone bust for taking the same risks. Is it as much a measure of chance?

Not to suggest there's no such thing as talented people, just not 100% correlated with being sucessful.

Cheers,
UTB

I'm reading Reminiscences of a Stock Operator. He seemed to go from massive riches (millions) to losses (debt) to massive riches to losses continuously. I always wonder if it's bad money management while having a good strategy.

As for trading being like a business. Someone who got me into day trading told me that I have to treat it like a business.

"How to get Rich" by Felix Dennis

I agree that this book is a superb read. I like his no nonsense approach to getting rich. I am a fan of these sorts of books so I will look into the Richard Branson one at some stage. There are a lot of them on the market and some quite frankly are garbage. I heard Richard Dennis on BBC2 radio talking about his book and poetry. Not sure that poetry about trading would de-stress but if it works, fair played.

That gives me an idea...

shadowninja said:

I'm reading Reminiscences of a Stock Operator. He seemed to go from massive riches (millions) to losses (debt) to massive riches to losses continuously. I always wonder if it's bad money management while having a good strategy.

As for trading being like a business. Someone who got me into day trading told me that I have to treat it like a business.

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I am also reading ROSO and I think it is a great book.

shadowninja said:

That gives me an idea...

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OK here goes.....

There was a young trader called Ross
Who never could work for a boss
So he got himself margin
Cos he hoped for a bargain
But the price just hit his stop loss

Now, before you comment, I did not say that I was any good. Since I 've stopped trading I thought I'd give it a go. I think it actually works.........

that made me laugh.