TRADE YOUR WAY TO FINANCIAL FREEDOM Foreword by David Mob& Sr. xiii Acknowledgements xvii VAN K. THARP Preface xxi PART ONE THE MOST IMPORTANT FACTOR IN YOUR ESS: YOU! The Legend of the Holy Grail 3 The Holy Grail Metaphor 6 What’s Really Important to Trading 9 Modeling Market Geniuses 11 Summary 14 chapter 2 Judgmental Biases: Why Mastering the Markets Is So Difficult for Most People 17 Biases That Affect Trading System Development 20 Biases That Affect How You Test Trading Systems 35 Biases That Affect How You Trade Your System 38 Summary 41 Chapter 3 __- Setting Your Objectives 45 Designing Objectives Is a Major Part of Your System Work 47 Tom Basso on Objectives 48 Chapter 6 Setting Your Own Objectives 57 Understanding Expectancy and Other Keys to Trading ess 130 PART TWO: The Six Keys to Investment ess 130 The Snow Fight Metaphor 133 CONCEPTUALIZATION OF YOUR SYSTEM Looking at Expectancy under a Magnifying Glass 137 Expectancy and R Multiples 143 Chapter 4 Expectancy Applied to the Market 148 Steps to Developing a System 61 Using Expectancy to Evaluate Different Systems 152 1. Take an Inventory 61 A Review of How to Use Expectancy 158 2. Develop an Open Mind and Gather Market Information 63 3. Determine Your Objectives 66 4. Determine Your Time Frame for Trading 66 5. Determine the Best Historical Moves in That Time Frame and PART THREE: Notice What Those Moves Have mon 69 UNDERSTANDING THE KEY PARTS 6. What’s the Concept behind Those Moves and How Can You OF YOUR SYSTEM Objectively Measure Your Concept? 70 7. Add Your Stops and Transaction Costs 72 Chapter 7 8. Add Your Profit-Exits and Determine Your Expectancy 73 __- 9. Look for Huge Reward Trades 74 Using Setups 165 10. Optimize with Position Sizing 76 The Four Phases of Entry 167 11. Determine How You Can Improve Your System 77 Setups for Stalking the Market 172 12. Worst-Case Scenari-Mental Planning 78 Filters versus S
