Hi friends, today we will do a Book Review ‘The Laws of Trading’ by Agustin Lebron –
This book is about how to improve your decision-making skills by applying the principles of trading to various domains of life.
The author is a former prop trader and engineer who draws on his experience and research to offer practical and insightful advice on how to avoid common biases, errors and traps in decision-making.
The book covers topics such as risk management, information gathering, mental models, game theory, feedback loops and more. The book is aimed at anyone who wants to make better decisions, not just traders.
Reviews of the book ‘The Laws of Trading’
- “The Laws of Trading is different. Its purpose is to teach specific mental skills that extend far beyond the trading floor to wherever rational decision-making is important.”
- “Trading books generally break down into two categories: the ones which claim to teach you how to make money trading, and the memoir-style books recounting scandals and bad behavior. But the former don’t have profitable trades to teach; if they did they’d keep those trades to themselves.”
- “It is either: A former trader sharing stories from their glory days, e.g. Liar’s Poker, the exposé that morphed into a how-to guide, or. Tales of Icarus flying too close to the sun, where readers revel in schadenfreude, e.g., When Genius Failed.”
Based on these reviews, I would say that the book is a valuable and interesting read for anyone who wants to learn how to think like a trader and apply that mindset to other areas of life.
The book is not a typical trading book that promises easy money or exposes scandals, but rather a guide to better decision-making for everyone.
I hope this helps. Do you have any specific questions about the book? Feel free to ask in comments.
Summary of the book ‘The Laws of Trading’
Some of the laws mentioned in the book are:
- Law 1: Every decision is a trade. This means that every choice we make has a cost and a benefit, and we should weigh them carefully before deciding.
- Law 2: You are not your trade. This means that we should not let our emotions or ego interfere with our trading decisions, and we should be able to admit our mistakes and learn from them.
- Law 3: The market is always right. This means that we should respect the reality of the market and not try to impose our own beliefs or opinions on it.
- Law 4: Information is not knowledge. This means that we should not confuse having access to data with having understanding or insight, and we should seek quality over quantity of information.
- Law 5: Trading is a game of incomplete information. This means that we should accept that we can never know everything about the market or the future, and we should focus on what we can control and manage our risks accordingly.
Conclusion
These are just some of the laws that the author discusses in the book. There are many more that cover topics such as probability, uncertainty, feedback, incentives, game theory, mental models, and more. The author also provides examples and exercises to help readers apply the laws to their own decision-making situations.
This book is for anyone who wants to improve their decision-making skills by learning from the principles of trading.
The book is not only for traders but for anyone who faces complex and uncertain situations in their personal or professional lives. The book aims to teach specific mental skills that can help people make better decisions in any domain.
If you are interested in reading the book, you can find it on Amazon