For those of you that follow my blog, you will probably have read my views on the TV series “Million Dollar Traders” (click here for those posts) and so I was naturally curious when I came across Lex’s book.
Retailing at £9.99 I figured it was a good trade. Lex is clearly enjoying a stint in the public eye and I was quite interested to see how he approached his trading.
The book is aimed very much at the entry level trader, with a fair few chapters covering the very basics of trading including sections on the financial markets and analysing companies through to slightly more meatier sections on technical analysis and risk management.
There wasn’t much in the book for the more experienced trader but there is no doubt that it covers a good portion of what is required in order to become a successful trader. The sections that interested me most were on ideas generation and general economic indicators. Lex uses something called the ISM Index.
The ISM Index
The ISM index is compiled using data collected from 1000’s of companies in the US who are involved in the Supply chain and I quote “Is the best tool for predicting US GDP”. I strongly urge anyone who has not heard of this metric (as I hadn’t) to have a look at the ISM website and in particular the Non-Manufacturing Index. Scroll down to the 2nd table on the page and note how the trend of the index corresponded perfectly with the FTSE100 April lows.
There are also solid sections on risk and money management and how to build a balanced and hedged portfolio. The book is certainly not aimed at the experienced trader as it is far too lightweight, but none the less for the £5.49 price on Amazon it’s good value and somewhere in there is a nugget that you may well take away and use in your trading.
not exactly a strong buy signal. Glad i remembered you’d tweeted this as i was standing holding a copy and thinking about buying it in whsmith. Now i’ll choose something else instead…
Next time we hook up you can borrow my copy! There is the odd nugget in the book (the ISM index for example) but apart from that it is very much targeting the newbie/very green behind the ears trader!
For a slightly off-topic read I can highly recommend “A colossal failure of common sense” by Larry Macdonald – All about the Lehman failure. Macdonald worked as a trader at Lehman’s. This book is his account of what happened during the run-up to their collapse. A really well written book. 9/10!!