Super Trader

Van K. Tharp argues here that the trading "Holy Grail" does not exist as an external system, but in the combination of your personality, your goals and rigorous position sizing.

He revisits and expands on concepts he had already introduced in Trade Your Way to Financial Freedom, such as "system expectancy" and the R-multiple, and organises them into a progressive programme with distinct development stages for the trader, from beginner through to someone already trading with some experience.

One of the points that tends to surprise most is his insistence that you do not need to be right on most trades to be profitable: it is enough for your gains, measured in R, to comfortably outweigh your losses. He also devotes space to evaluating yourself as a trader at different stages and what to work on at each one.

It is especially useful if you trade under a defined maximum drawdown, as at a prop firm, because the position sizing Tharp teaches has a direct bearing on whether you pass the evaluation or lose the account to a poorly managed losing streak. If you want a more introductory foundation from the same author, this catalogue also has Trade Your Way to Financial Freedom.