By Cam R
Title 1: Trading Rules: Strategies for Success
Title 2: Trading Rules II: More Strategies for Success
Title 2: Trading Rules II: More Strategies for Success
Author: William F. Eng
Penned by former floor trader William F. Eng, back when floor
trading was in its heyday, they
detail the rules that he follows for trading success. The first book must have
sold decently, as he followed it up with a second book. And I have decided to
review them as together as one because they are really complementary. The
contents are pretty much similar across both books.
In any case, are the trading rules really strategies for success,
and are they applicable for today’s modern electronic markets? Let’s find out
below.
Packaging - 3/5
Slightly smaller than A4 size, both paperbacks feel sturdy in my
hands. The printing and paper quality are both decent, and the cover designs
are simple and uncluttered. Not snazzy by today’s standards, but they are
pleasant enough and somewhat gives the sense of being a textbook.
Writing Style - 3/5
The books are structured such that each chapter corresponds to one
rule. The writing style is clear enough and the explanations he puts forth are
easily understandable. It feels a little like a kindly relative trying to pass on their experience to someone younger, but in a nice and approachable manner.
Trading Methods (Specifics) - 2/5
Since these are books on trading rules, there is not a lot of meat
on trading methods itself. But I did find some of his general concepts on
the big picture very refreshing.
Here are some of his thoughts on trade initiation and taking the small
loss.
“When you place a trade, it can be turned into a long-term trade,
or into a short-term trade, but whatever the final duration, the initial trade
must be made with the expectation or intent of it being a short-term trade.
The essential difference between a winning trader and a losing
trader is how they classify their initial short term trades. At the time you initiate
a trade, you don’t know if it will turn into a profit or a loss. The lack of a
strict understanding of what is defined as a loss, even though the trade is not
closed, is important in causing you to trade unsuccessfully.
If you have a trade that is not closed, you have a tendency to
believe that whatever it is, a profit or a loss, it isn't affecting your
profitability. Nothing could be further from the truth, because the trade has
to be closed eventually.”
Trading Management (Soft Skills) - 4/5
This is where the book does prove its
worth however. There are actually a fair number of rules, although they are all
logical and do seem to merit their place in trading after going through his
explanations. Many of the things that he mentioned are also clear-cut and make
sense. He also does a proper job of sounding a proper note of caution of
the risks of trading.
Here’s his note of caution on learning
from your mistakes:
“If you want to come out ahead, do not
keep repeating your mistakes. In this way, you will eventually succeed. Remember,
also, that the market always gives you a thousand and one opportunities for new
errors, so be on guard.
As you progress, you must make fewer
mistakes, and become more professional. This is exactly what you must do to
become a professional trader who makes money consistently and frequently. You
cannot allow the ease of entering this business to deceive you into believing
that laxity in this business is similar to laxity in any other business. This
business is not similar to other businesses and the mistakes are not forgiveable.”
By mistakes not being forgiveable, he is
probably referring to the fact that the money made or lost is real. And this is
probably even more relevant in the age of electronic trading, where everything seems
to be just a number on the screen. It’s always good to keep in mind that behind
the electronic number is real money. And that successful trading is not about
making money, but about accumulating money. And he gets this point across in
the books too.
Trading Psychology (Mindset) - 3/5
A couple of the rules relate to the proper mindset to have, which
is always helpful. I also found him to be an encouraging voice, which is always
a plus as it keeps the tone of the book positive and uplifting.
Some encouraging thoughts of his:
"When you encounter difficulties in trading, know that the
problems you face are only insurmountable from your immediate perspective.
Others have confronted similar ones. Some allowed the problems to waste them;
others took the opposite tack by facing the problems directly and overcoming
them.
You are your own profit center. No one and nothing else can make
the profits for you, but with the right spirit, no one and nothing else can
keep you from making those profits, except you.”
And some forward-moving pushes from him:
“You will have to and can only rely on yourself to find the
answers. As it always should be. Note that human nature has a desire to empower
others with control of their lives than make the difficult decision to take full
responsibility for their lives. We all have to start somewhere. What better
place than the beginning? At least if you start at the beginning, you have an assurance
that you won’t miss anything.
However, after you have acquired the knowledge, you must move
forward. All the time that you are gaining experience, you might not know what
the benefit will be. But if you encounter enough similar experiences, you will
know what is important enough to you that you will repeat situations which
create similar experiences. That is a major clue to what you must learn to
overcome any blocks in your progress to becoming a successful trader.”
Longevity - 3/5
I found myself occasionally recalling some of the ideas and rules
in his books. They were genuinely useful. Definitely a helpful set of books to
have on the shelf, as the rules are still very relevant for trading then and
now.
Value - 4/5
I had picked up quite a fair bit of knowledge from both books. Plus, some of the
ideas Eng put forth are practical and applicable. Good value
for the knowledge contained in the books.
Things to Watch Out For -
He was a floor trader previously, so some of the things relating
to floor trading he mentions may not be relevant now. Also, there is a sombre
tone somewhat at the introduction of the book, where he talks about a friend
who committed suicide because he lost a huge amount of money trading.
Overall - 3/5
I can’t really remember how I came across his books, but I am grateful
that I did because I do appreciate some of the ideas and rules he shared in these
books. It’s probably most useful for traders at an intermediate level. Novices might
not pick up much while veterans would probably already have an innate understanding
of most of the rules. It’s an interesting and easy-going read nonetheless, I
would recommend reading it if you can.
Score Recap:
Packaging - 3/5
Writing Style - 3/5
Trading Methods (Specifics) - 2/5
Trading Management (Soft Skills) - 4/5
Trading Psychology (Mindset) - 3/5
Longevity -3/5
Value - 4/5
Overall - 3/5
Where to Buy:
If the above review was useful to you, and you intend to purchase these books, do consider buying them from my Amazon affiliate links below. It is a huge support and motivation from you to me for this site. Thank you!
Thank you for for taking the time to read my review!
Do come back often as I will have new reviews up frequently. :)
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