Adrian Manz has earned his living as a full-time professional equities trader for the past 15 years. ?Those years,? he says, ?have been characterised by constant learning? ? a statement that should be no surprise to any other traders out there. Somewhat uniquely for a leading professional trader, however, Manz is now prepared to share in detail the secrets of what he has learned. In Beat the Street, he reveals with great thoroughness all the strategies and tools that he has used to accomplish his success.
Trading profitably requires an understanding of the markets, strategy and yourself. Manz?s trading has evolved significantly over the years, as has his thinking. He has developed a methodology that relies on market dynamics, represented in easy-to-spot patterns, to get him in front of trading opportunities with a high probability of a successful outcome.
He prepares for tomorrow?s trading after the close of trading today. The results of this fastidious planning have been impressive, with a track record over the past six years that does not include a single losing month. There are losing days, and losing weeks, but month over month the strategies that he describes in this book have kept him in business while many of his contemporaries have been less fortunate.
Manz says his goal with this book is to teach the reader a consistent and conservative methodology for trading the financial markets. He has used the exact patterns and methods presented in its pages for 15 years to generate consistent trading results. Consistency is the key to survival in trading. Manz believes that by studying each chapter carefully, and internalising the spirit, cause and effect of each pattern, you will be better positioned to achieve consistency than 99% of the people who attempt to trade for a living.
Trading also involves a significant psychological challenge. It is not enough to learn to think differently from an investor. A trader, says Manz, also needs to reframe what defines success and failure. The book is infused with this sensibility, and begins with a strong outline of how to improve your trading psychology.
Success, notes Manz, is typically associated with winning; failure with losing. The parallels in trading would be making or losing money. Yet, remarks Manz, these most basic measures of accomplishment, unless radically rethought, will only undermine a trader?s ability to succeed. Winning feels good. Losing feels bad. Most human beings are hardwired to avoid the latter emotion. In trading, Manz warns, this translates into snatching at winners and self-denial over losers; and that spells certain failure. Those who wash out of the game usually do so because of this simple psychology. It means they never grasp the most basic axiom of successful trading: let your winners run and cut your losers short.
Taking many small gains and a few large losses is a quick route to ruin and Manz argues that trading demands that those who hope to persevere engage in a psychological paradigm shift. His personal paradigm, he says, is quite effective. He knows that his trading plan generates great results over time. Whether he gains or loses money today has no bearing on that fact. He judges his success or failure by a simple benchmark: whether or not he followed his plan to the letter. If he did, he succeeded. If he did not, he failed. This is true whether he made or lost money on the session.
To be a successful trader, says Manz, you must love the great game that is the stock market. You must be on a constant quest to hone your skills at the game. There are no good or bad days ? just days with varying degrees of opportunity and more or less success in the implementation of a trading plan.
His perception of the market is ever-evolving. He sees things very differently today than he did back in the 1990s. The differences that he perceives are, he says, very real. A dozen years ago opportunity presented itself in a manner very similar to a fast-action video game. If you showed up ready to play the game, Manz argues, you had a good chance of turning a profit. All that was needed was a sound strategy and nerves of steel. In the 1990s, he would go to work in the morning, assess the direction of the pre-market futures, and get ready to capitalise on any momentum that correlated with what the broader markets and sectors were doing. While this style of trading still represents a small portion of his daily activity, the majority of what he does is the result of careful planning.
Beat the Street covers all of what he does, from carefully planned to semi-discretionary trading. There is no secret here ? the only thing that cannot be conveyed in this book is the hand of experience in steering the selection and execution process. The only way to gain that insight is by becoming a student of the patterns and the markets, and putting in the time to become an expert in each. In the meantime, with the exact chart patterns that Adrian Manz has used to plan each and every trade he has taken over the past 15 years, Beat the Street certainly furnishes traders with plenty to begin with.