Stock Market Technique Number One | By Richard D. Wyckoff

BOOK REVIEW

By Cam R

Title: Stock Market Technique Number One

Author: Richard D. Wyckoff

A collection of trading related articles by Richard D. Wyckoff from his Wall Street magazine way, during the era of Livermore, Morgan and all the big stock market operators. Wyckoff is probably the one trader mentioned more often than not when talks about tape reading because of his popular book Studies in Tape Reading (Review Here). Although not as famous as his tape reading book, Stock Market Technique Number One is generally regarded very favourably by traders who have had the pleasure of reading it. Plus, he was friends with Jesse Livermore, so there are the rare insights and little-known tidbits from his comings and goings with Livermore sprinkled through this book.

So does the book deserve its favourable sentiment? We’ll see below.

Packaging - 3/5

A small chunk of a book, it almost feels like a small and thick organiser in your hands due to its bulk. The nice and thick paper is of good quality, although there isn't much space for scribbling. Also, one thing to note is that the font is small, probably because the book is more like a mini compilation of the magazine articles - think scrapbook. The style does lend a certain credence to its old-world charm, it certainly made me like the book more. I wish the cover had been of tougher paper though, it feels like it will wear off with frequent handling or in accidental contact with water.

Writing Style - 3/5

From the same era and thus similar in style to Reminiscences of a Stock Operator, the English used will feel slightly archaic at first. But keep on reading and the no-nonsense and dry wit style of Wyckoff’s writing will start to grow on you. Some of the articles are really humorous and have a sage-like tone and wisdom about them, very grandfatherly like at times.

Trading Methods (Specifics) - 3/5

No specifics on trading methods, as that would be found in his other books. Stock Market Technique Number One was mostly Wyckoff penning his thoughts and viewpoints on Wall Street and trading in general. However, many of his one-liners on trading throughout the book (he calls them flashes) are true gems, and are more valuable than any specific methods to me.

Some of my favourites are:

-         Whether asked whether the market was going up or down, the late J.P. Morgan replied: “Young man, I think the market is going to fluctuate."

-         Livermore once said to me: “I go long or short as close as I can to the danger point, and if the danger becomes real I close out and take a small loss.”

-         Three men came to Wall Street. The first always knew what was the best buy. The second knew why it was best to buy. But the third knew neither of these things; he only knew when to buy. He made the most money.

Trading Management (Soft Skills) - 3/5

Not much in the way of specifics again, but I found his series of Old Timer stories very instructive.

Here’s one of my favourites below.

(Old Timer talking to Young Man)

“Take my word for it, a lot of money is a big handicap to a chap who wants to learn how to trade in stocks successfully. If your judgement, young man, were one hundred percent good, you could build up a fortune starting with one hundred dollars; for you’d never take a loss. But as you can’t be right all the time, you must suffer some losses.

My advice to you is this: When you think you can beat that old market, take a hundred dollars and prove it. If you succeed with that hundred, you’ll be a rare bird. If you lose it, dig up another hundred and keep on that way till you get a hundred that will stick. Build on that one. Don’t kid yourself that you need $1000 or $2000; that’s too much like the rest of the public. 

Whenever you get a setback, find out why. Trade on both sides of the market. Ride ‘em up and ride ‘em down. Cut your losses and eventually your profits will outstrip them. Always present a thin edge to the enemy; never let him give you a broadside. But the main thing is: Keep at it till you really learn how, and then you won’t have to worry where your capital is coming from.”

Trading Psychology (Mindset) - 2/5

Definitely on the thin end in relation to the actual mindset required for trading. He has a tendency to keep on going about the need to actually learn how to trade before trading. It’s a bit like being told to just exercise when you want to lose weight.

Longevity - 3/5

A classic book that should have a place in any trader’s collection, mostly because of the one-liners collection. I find myself going back and re-reading some of the flashes at times, they are just brilliant and humorous truths on trading.

Value - 4/5

Definitely worth reading, but with the caveat that your enjoyment of the book will likely depend on your level of trading experience. Anyone new to trading would probably find the book acceptable. But anyone with trading experience would find it a very enjoyable read I believe. Big plus is it's less than $15 for a new copy too.

Things to Watch Out For -

If you want to learn about the mechanics of trading, this is definitely not the book for you. Nor is it a book suitable for anyone new to trading as some of the stories might not make much sense.

Overall - 3/5

A gem of a book, one I think is well worth reading and having in a collection. I’m really glad I had the good fortune to come across this delightful little book.

Score Recap:

Packaging - 3/5

Writing Style - 3/5

Trading Methods (Specifics) - 3/5

Trading Management (Soft Skills) - 3/5

Trading Psychology (Mindset) - 2/5

Longevity -3/5

Value - 4/5

Overall - 3/5

Where to Buy:

If you found the above review helpful and want to buy the book, please do consider buying it from my Amazon affiliate link below. The prices are competitive, and any purchase goes a long way in supporting this site and as a small motivation for me to continue working on this resource for you.  Thank you!

Related Books
There is actually a sequel to this book, simply titled Stock Market Technique Number Two (Review Here). They are both similar in style, so if you enjoy this book, you would probably enjoy the second one too.

Anyone interested more on the subject of tape reading itself should check out Wyckoff's other book, Studies in Tape Reading (Review Here). I consider it one of the best books for anyone looking to learn more on the art of reading the tape.

Thank you very much for reading!
And do check back for new and updated book reviews, cheers! :)