Thu, February 24, 2011
Book Review: The Compleat Day Trader
Today I'm reviewing a book that's rather outside my normal realm of interest: the second edition of "The Compleat Day Trader."
I should begin by acknowledging that I’ve always felt a bit dubious about day trading. I know there are people who do it very successfully, but it can’t be possible for everyone who trades to make money. Moreover, with major financial firms trading with high-speed computers, it’s less likely than ever that the average day trader can expect to make a killing using a PC and a brokerage account. Thus, I approached the book with a measure of skepticism.
To his credit, author Jake Bernstein makes no secret of the fact that the majority of day-traders lose money. In “The Compleat Day Trader,” he offers insights into the realities of day trading intended to enable those to trade to do so more profitably. The book is an updating of two earlier books, the first published in 1995.
Although Bernstein begins with a promise that the book will be useful to novices and experienced day traders alike, it seems very unlikely that it will be helpful to someone who doesn’t already have a fair knowledge of the ins and outs of trading. The book is quite short on explanations; for example, the chapter on the “basics” is barely ten pages long and provides very little orientation to the topic.
The book does a good job, however, of summarizing a wide variety of day trading methods that Bernstein has found profitable. It includes a wealth of trading case studies, though, again, these are rarely explained in a way that a non-specialist will grasp easily.
Readers seeking step-by-step guidance in day-trading will find the book short on details. For example, although Bernstein repeatedly warns against beginning as a trader with an inadequate amount of capital, he gives no hint as to how one would determine what constitutes an adequate amount. “The Compleat Day Trader” will undoubtedly be useful to readers who already have some familiarity with day trading; for others, it will only be useful in conjunction with some sort of introduction to the topic.
Full disclosure: I was given a free review copy of this book.