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- Wiley
More About This Title The Laws of Trading: A Trader's Guide to Better Decision-Making for Everyone
English
Every decision is a trade. Learn to think about the ones you should do — and the ones you shouldn’t.
Trading books generally break down into two categories: the ones which claim to teach you how to make money trading, and the memoir-style books recounting scandals and bad behavior. But the former don't have profitable trades to teach; if they did they'd keep those trades to themselves. And the latter are frequently entertaining, but they don't leave you with much you can apply in your own life. The Laws of Trading is different.
All of our relationships and decisions involve trading at some level. This is a book about decision-making through the lens of a professional prop trader. For years, behavioral and cognitive scientists have shown us how human decision-making is flawed and biased. But how do you learn to avoid these problems in day-to-day decisions where you have to react in real-time? What are the important things to think about and to act on? The world needs a book by a prop trader who has lived, breathed and taught trading for a living, drawing upon years of insights on the trading floor in real markets, good and bad, whether going sideways, crashing, or bubbling over. If you can master the decision-making skills needed to profitably trade in modern markets, you can master decision-making in all walks of life. This book will teach you exactly those skills.
- Introduces, develops, and applies one law per chapter, making it easy not only to remember useful concepts, but also to have them at the ready in any situation.
- Shows you how to find and think about the “special edge” of your organization, and yourself.
- Teaches you how to handle the interaction of people with artificially intelligent (AI) machines that make decisions, a skill that is rapidly becoming essential in the AI-driven economy of the future.
- Includes a "bonus" digital ancillary, an Excel spreadsheet with various worked examples that expand on the scenarios described in the book.
Do you need to make rational decisions in a competitive environment? Almost everyone does. This book will teach you the tools that let you do your job better.
English
Agustin Lebron started out as an electrical engineer, then became a trader and researcher at Jane Street Capital, arguably the most successful prop trading firm in the world. There, he developed training materials for new traders and trading interns. The Financial Crisis of 2008 was an interesting time to undertake a career in finance, and those formative experiences have stayed with him throughout his career. Over the years he has traded many kinds of securities: equities, futures, commodities, options, and an assortment of other derivatives. He has created, developed and implemented several successful trading strategies, and has evaluated and advised on the development of dozens of others. He currently lives in Carlsbad CA and runs Essilen Research, a consulting firm dedicated to applying insights from the world of finance more broadly. His expertise is teaching individuals and organizations how to think rationally in competitive uncertain environments.
English
Introduction
Chapter 1: Motivation
Know why you’re doing the trade before you trade.
Chapter 2: Adverse Selection
You’re never happy with the amount you traded.
Chapter 3: Risk
Take only the risks you’re paid to take. Hedge the others.
Chapter 4: Liquidity
Put on a risk using the most liquid instrument for that risk.
Chapter 5: Edge
If you can't explain your edge in five minutes, you don't have a very good one.
Chapter 6: Models
The model expresses the edge.
Chapter 7: Costs
If your costs seem negligible relative to your edge, you're wrong about at least one of them.
Chapter 8: Possibility
Just because something has never happened doesn't mean it can't.
Chapter 9: Alignment
Working to align everyone’s interests is time well-spent.
Chapter 10: Technology
If you don’t master technology and data, you're losing to someone who does.
Chapter 11: Adaptation
If you're not getting better, you're getting worse.
Glossary
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