Each chapter is filled with conversations between a rich trader and a new trader. Whether or not you are a new trader or rich trader, you can literally put yourself in the shoes of either of these individuals. Their habits are extremely relevant and easy to relate to.
For example, Steve describes new traders as having the tendency to be impatient and constantly look for action. Looking back on my eight years of trading experience, I remember as a new trader, I always felt the need to have my money in the market. The reason being because I felt like if I didn't I would miss out on a move. However, Steve explain that it is much more important to place trades based on probability. That is exactly what rich traders focus on.
Not only does he show you what you need to do, but he teaches you how to do it.
Here is an excerpt from the book:
The below is a conversation between a rich trader and new trader.
When Rich Trader answered the phone in his normal, pleasant voice, New Trader wasted no time. He got right to the point.
"Have you ever made a trade without knowing why you did it?"
"Yes, when I was much younger, in the heat of battle, when the stakes were high and the adrenaline got going, I did things I regretted."
"What causes overtrading or spontaneous trading?"
"I would say this particular problem is caused by a few different things:
1. Not having a specific trading plan.
2. Being bored and looking for excitement.
3. Being arrogant and thinking you can trade just based on being smarter than other traders."
"And what can I do to stop this?"
What is the not so great about it?
Without a doubt, Steve touches on the core essentials and necessary skills to become a rich trader. He also does so in a reader friendly format. However, if you are looking for technical analysis or actual strategies to implement, this isn't the book for you. What Steve's book is is a great complement to an existing trading plan
. Also if you are looking for a flashy read or want to read about someone who turned X amount of dollars into $2 million, then this is not the book for you.
What is your final recommendation?
Whether you are an experienced trader or a novice trader, there is something for everyone in this book. As an experienced trader, I'm always looking for ways to get better and to sharpen my edge in the market. Whether that be through changing the way I managing my risk or just being more consistent, there is always room for improvement. Steve's book is a great reminder to those "paid" lessons learned in the market.
For new traders, his book is an excellent resource in jumping ahead of the learning curve. If you are able to master Steve's core principles, you'll be that much closer to being a more consistent and profitable trader. There are a boatload of strategies out there and truthfully, I believe you can make money in a lot of those strategies. But, the key difference between a rich trader and a new trader is in the psychology, methodology, and risk management
"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when your're wrong" - George Soros
Conclusion: New Trader, Rich Trader: How to Make Money in the Stock Market
is a recommended read for novice and professional traders alike.