The Playbook: An Inside Look at How to Think Like a Professional Trader

When I started reading the book (the introduction), I thought I was reading a novel and was so captivated by the events that I started hoping for a happy ending. But that was real life -the author's personal life. It`s about resilience in the face of suffering and vicissitudes of life. The lesson is that you cannot control what life throws at you but you can control your reactions. Positive attitude and perseverance always prevail and the analogy with the market and trading is obvious. You cannot control the market but with hard work, determination, and persistence the trader can achieve positive outcomes.Most trading books give you "canned" methodologies. This book also give you a superb methodology to work with but it also opens the door wide open for creativity, urges the trader to keep an open mind and continually strive to hone one's trading skills in order to be able to adapt to new market conditions. Also, the book emphasizes that trading is not rocket science. It s all about doing one's homework, managing risk, and learning from one's mistakes by reviewing and scrutinizing one's trades daily. This is explained by giving real examples of real trades executed by real traders.On this basis, every trader has to create a "PlayBook" in order to "archive" the best patterns that work best, "internalize" them and make them his/her own. This creative mindset is the key to survival in the market. The following quote summarizes it: "Trading is a skill that must be learned and honed.. You must develop a PlayBook of trading patterns that make the most sense to you. To become great at these setups takes experience, practice, and a love for your game. Only then can you join First Team Wall Street." Pg 202Moreover, the author stretches the importance of constant coaching because even the best traders need coaches. He gives the example of famous athletes who surround themselves with teams of coaches and traders are no exception, they need coaches too. Needless to say, the trader has to be always pro-active, perpetually thinking of ways to improve his/her game. In other words, mentors are important but nothing replaces hard work and the daily endeavor for self-improvement. The author writes: "understand what the masters have done and then incorporate what you've learned into your own style." Pg 44One more thing I like in the book is the author's appreciation of the good work. He emphasizes the importance of reaching out to other traders, talking to them, inviting them for lunch. The interaction with other traders can play a vital role in the trader's development. The book refers to many resourceful works of other traders. I will mention only Dr Brett Steenbarger for whom the author has a special appreciation.It's important to note that this book is more than trading techniques and strategies. It's about the path to success and success is more about hard work and preparation than luck. The trader's focus should be on daily self-improvement and not the outcome or results. "Everyday is an opportunity for continuing education." Pg 360 With this mindset, the results will come naturally. The daily challenge is how good can you be? It's the path to self-actualization. It's a very inspiring and empowering bookFinally, I liked the quotes mentioned by the author especially the Bruce Lee quote "Use whatever works, and take it from wherever you can find it." Pg 17 It's very relevant. Bruce lee studied hundreds of fighting styles but he came up with his own style -his own PlayBook- his own fighting method. This idea is the gist of "The PlayBook". Traders have to be open to all "trading styles" and work diligently to find the setups that work best for them. The author writes: "My hope for you is that this book gives you the tools to build your trading PlayBook. It will help you frame your own unique PlayBook that best utilizes your strengths." Pg 52Bottom line, the book is an excellent read and worth your intellectual energy and time. It will push you to think out of the box when it comes to trading and inspire you to have a positive attitude towards life in general.

Having read many books on the markets and trading, for me, maybe 5% of books make 80% of the difference. Personally I count this book and its predecessor (One good trade) among the 5%. For the record I have been trading/investing in the markets actively for about 9 years now. Overall I am consistently profitable (Although I could do better)There are several powerful points I took from this book that I had not seen from any other book. Probably the most powerful (for me) was the point about how there had never been recorded evidence of an elite performer (of any endeavor) ever getting to that status without some form of regular critical feedback from an elite coach. This was a very exciting realization for me. After thinking about it, I realized the accuracy of this statement. Warren Buffet had Benjamin Graham (Among many others), Paul Tudor Jones had Eli Tullis (Among many others) etc.... The Author even mentions Pro Golfer Phil Mickelson and details 6 of his coaches.Another uniquely powerful point made in the book was that of the trader GMAN. He was profiled in the first book "One good trade" after having a rough start GMAN became very successful trading for SMB capital, became head trader then a partner in the firm. What stood out was that after being placed on Wall Street's top traders under 30 list. GMAN got so burned out he wasn't trading very well, he was ready to leave SMB capital and move out west. However GMAN began working with various coaches to get him back on track and into the proper mindset again. Today he is back to high performance and doing well again. I rarely read stories like this about highly successful traders going through slumps, though I do see this in sports often.Something else that stood out to me was an email the author received from a trader who had been trying to succeed at trading for 8 years (Pg. 352). The email was of this trader throwing in the towel, after losing approximately $40,000 over that 8 year period. This was hard to read, but this trader I give props to for being so honest with himself and sharing his story with the author. What was particularly interesting is the trader knew exactly what he was doing wrong but psychologically couldn't execute the proper solutions to the problem. The Author shares his response to the trader which is an interesting lesson in and of itself.The author made a point of the lack of proper collegiate training for traders. Which is something I agree with completely.The book is structured somewhat similar to the author's first book, One Good Trade. In that individual traders are profiled as examples of lessons the author is teaching. I enjoyed this because in many ways I identified with the various aspects of each trader profiled.For those who are looking for methodologies to approach the market, the author does give a methodology that his firm uses in order to setup trade ideas. It breaks into 5 parts: 1)The Big Picture 2)Intraday Fundamentals 3)Technical Analysis (Long and short term) 4) Reading the Tap 5) Intuition (to be used only after much experience in the markets).In addition exits are discussed in a section on Reasons2exit or Reasons2sell(Cover). As well as discussions on position sizing.As I stated before, I think this book is very good.