So you want to become an independent trader, either to supplement your income or eventually to have trading be your sole source of income? Bennett A. McDowell has written Survival Guide for Traders: How to Set Up and Organize Your Trading Business (Wiley, 2012) for the novice who wants to get started but doesn’t quite know how to go about it. If the wannabe trader doesn’t feel quite ready to plunge into the markets after reading this book, McDowell is more than ready to sell him a range of pricey products on his website TradersCoach.com.
Like all start-up businesses, trading is difficult and prone to failure. What will give the novice a shot at being successful? McDowell offers six pointers: (1) understand it will be a lot of work, (2) get adequate financing, (3) plan, plan, and plan some more, (4) start your business for the right reasons, (5) be resilient and persevere, and (6) create a model that can be profitable. And, he adds, reduce your expenses because with taxes a penny saved is closer to a penny and a half earned.
McDowell covers a lot of territory in this book, from how to choose the best data feed, broker, and front-end platform for your needs to money management and financial psychology. He offers a detailed business plan template. He lists some technical analysis signals and tools (those included in his own software are at the top of the list) and five popular scanning tools (again, his scanner heads the list).
What is the holy grail of trading? McDowell suggests that is perseverance: “those who survive and prosper for the long term are the traders who can persevere through thick and thin and just keep going with new solutions and strategies.” (p. 132)
Survival Guide for Traders is a good primer with an abundance, sometimes an overabundance, of information, but of course the reader won’t go from “See Spot run” to “Sleep that knits up the ravelled sleave of care” in one fell swoop. There’s a lot of work and practice in between.