The Naked Trader
Robbie Burns · 2005
A plain-spoken guide to trading shares for yourself, with the emphasis on rules and risk.
What it’s about
Robbie Burns, a private investor who trades for a living, writes a chatty, practical guide to trading UK shares from home. It’s been through several editions. It covers how to pick and research shares, how to size positions, when to sell, and the mistakes he sees people make, with a strong emphasis on keeping losses small.
What I learned
Rules come first. Decide your entry, exit and position size before you place the trade, because you won’t make good decisions in the moment.
Cut losses early. The most common mistake is hanging on to a loser in the hope it comes back. A stop loss is a decision made while calm.
Let winners run. The opposite instinct, taking profit too soon, quietly caps the upside that pays for the losses.
Keep it simple. A small number of well-understood positions beats a portfolio you can’t keep track of.
What I applied
The idea I kept from all of them: accept what you can’t control. The market moves however it moves. These books are really about methods of thinking for working on something where change can be completely out of your control, and letting that be. Decide your rules and your risk, act, then let the outcome go. It’s my favourite quote again, in another domain: change is unavoidable, so the only thing worth controlling is how you respond to it (Practical Object-Oriented Design in Ruby).
I read the markets books this year to understand the domain I build for: real-time trading interfaces at a fintech, with features like click-to-trade and request-for-quote. This one is the most plain-spoken of them.
What I took into my work is a design question rather than a trading habit: does the interface support discipline, or undermine it? If a trader’s best protection is rules made while calm, the UI should make those rules easy to set and hard to forget. Clear risk information near the action, confirmations where a mistake is expensive, and no visual noise pushing people to act on impulse.
That’s written as reflection. I’m still learning the domain, and these books are part of how I’m doing it.
Where it connects
Trading for Dummies · Trading in the Zone · The Disciplined Trader · Communicating with Stakeholders
↩ Mentioned in (3)
Twenty-odd books across code, platforms, teams, trading and science fiction turn out to make the same five arguments. Here's the thread that connects them.
book · Lita Epstein and Grayson Roze
Trading for DummiesThe fundamentals: order types, analysis, risk management and the vocabulary of markets.
book · Mark Douglas
Trading in the ZoneConsistency comes from thinking in probabilities and accepting risk, not from a better prediction.