Here is an interesting book you may want to read.
What I Learned Losing a Million Dollars (Hardcover)
by Jim Paul, Brendan Moynihan
Why a book on losing ? Because most books on trading gloss over losing, money management. They stress on technical indicators and trading systems.
This book is the personal adventure of the trader,Jim Paul, whose unbroken string of trading successes took him from a poor country boy to a jet setting millionaire and a member of the executive committee at the Chicago Merchantile Exchange before a devastating $1.6 million loss brought him crashing down.
Here are a classic gem from this book:
Speculating is the only human endeavor in which what feels good is the right thing to do.
We all know we should not smoke. A lot of us still do.
We all know we should not drink. A lot of us still do.
We know we should not drive over the speed limit. A lot of us still do.
Why do we do all these things that are not good for us, and that we know are not good for us?
Well, because they feel good.
It feels good to drink and smoke and drive fast.
But ever since we are kids, we have been told not to do things which feel good.
When it comes to the markets, you are supposed to do what feels good.
If you deviate from your plan and the market starts going against you, what are you going to say when I knock on your door and ask, "Well? Are you having fun? Is this an enjoyable experience ?"
You are going to say, "No! This is not fun. Looking at these prices going down is not fun"
You know what you should do ? Do not go looking for supporting evidence or reasons to stay in the market.
DO WHAT FEELS GOOD. GET OUT !!
Stay with the positions that make you feel good; get out of positions that make you feel bad.
I had purchased a second hand copy of this book for four dollars. Now it is available for greater than 70 dollars in Amazon and Barnes & Nobles, which is a bit strange. May be it is expensive because it is out of print. Or may be people think that spending a hundred dollar to learn to protect thousands of dollars is a worthwhile investment.
Before purchasing, try to see if you can borrow it from your local library to read.
Even if you are not interested in the market, this book is worth purchasing just to learn more about Jim's amazing life story. Jim is candid, funny and dynamic in this work. I wish the world had more people like Jim Paul and more books like "What I learned While Losing a Million Dollars."
PS:
According to one of Amazon's reviewers, the author Jim passed away on September 11, 2001 in 1 World Trade Center, New York.
