WILEY Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House

This book is a gem! Well written, covering a wide arrange of topics and with lots of different examples, including actual trading systems with robust metrics. I don't trade mechanical systems myself but still found a lot of great pearls of wisdom in this book. If you are serious about trading, you need to read this book.

5 starts for sure. This book is great in that it not only talks about finding your edge/system, but actually GIVES you several basic systems to start with and gives you ideas in how to tweak/modify and make them your own! It also gives you the coding for these systems as well. Almost all trading books give tell you that you need an edge/system with good expectancy. This is one of the few that actually shows you HOW. There is lots about risk management, trader psychology also to help you stick to the system in good times and bad times (more important). Either way, this book is exactly what I was looking for in order to create my own system.

Traders at every level can benefit from this book. It holds the most value for those with both trading experience and computerized trading systems design experience. Trading exposes a person to his or her true nature due to the market's instantaneous and ongoing feedback from the moment one initiates a trade until exit. Weissman comments on trader psychology throughout the book and includes techniques to deal with regret minimization and emotional decisions that run counter to rule-based trading. Designing computerized trading systems shows a trader how risk, volatility and portfolio composition interact with entry, exit and position sizing rules to generate a positive-expectancy model of the markets. Weissman utilizes numerous back-tested trading systems as examples in this book. Having some experience in the computer modeling world helps one to understand his examples, but even without such experience they illustrate his points as intended.There are three important concepts presented in detail. These are the casino paradigm, the cyclical nature of volatility and the psychological imperative to "trade the market not the money." A corollary to the latter is Weissman's mantra "don't anticipate, just participate," intended to remind the trader to avoid guessing (prediction) and gambling (betting when the odds are against you).A casino is a public room where people take risky action in hopes of making money. The author explains that the casino operator allows his customers to bet according to rules that guarantee on balance they lose their money. Rules that work to house advantage operate 24/7/365 with zero variance. The casino operator never strays from its winning system. Unlike most speculators who weep over a losing trade, customer wins in the casino are celebrated with fanfare and no regret: it keeps them coming back.A real-life example of a successful casino operator in the financial markets is Morgan Stanley's proprietary trading desk that recently revealed that they had zero days of trading losses in Q3 2013. The casino always wins. The markets are not a level playing field. The casino's risk is always tightly limited by table stakes (maximum bet size). Weissman recommends a trader's maximum risk level at one percent of equity. If we as individual traders wish to win money from the markets then we must design and execute our own trading systems with the rigor and discipline of a casino operator. Anything less will not work. In short, the primary message of this good book on trading is that a successful trader has a rule-based positive-expectancy trading system that he or she operates without variance.I do not recall another trading book that directly addresses the cyclical nature of volatility even though many systems utilize volatility to trigger signals. Weissman discusses volatility in the context of trend-following and counter-trend systems. The discussion and examples are interesting and useful. However, it introduces an element of subjectivity that dilutes the casino analogy. The author describes (not "recommends") using trend-following methods in high-volatility markets and counter-trend systems in lower-volatility markets. He explains that counter-trend systems are by nature more risky than trend-following systems. Yet to "trade like a casino" all such decisions must be quantified before a given system or system suite is traded. I suspect the author's intention is to allow discretion as a regret minimization technique, but that is exactly what gives the casino an edge. The casino analogy breaks down in the face of human traders speculating with real money in global markets. The occasional discretionary decision is why so few individual traders are consistent winners. Weissman recognizes this in his advice to assume every trade you take will end up losing money.My issues with the book are not related to the author's comments on trading, with which I am largely in agreement. I found myself repeatedly saying, "so I'm not the only one feeling this way or making that mistake." I do not think inclusion of CQG code is useful to the majority of readers. If it is desirable to include any code, it might be better to have a specific chapter explaining one mechanical trading system with code for several popular platforms included. I also think that a chapter on basic rule-based trading would be helpful to many, since virtually all of the examples assume the reader understands those concepts.Reading this book is likely to expand your understanding of how markets work, how successful traders think and how to avoid major mistakes. I rate this book five stars.

In gambling there are really only two sides, the gambler and the casino. The gambler has the long term odds stacked against them. The casino has the odds on their side in the long term. The more the gambler gambles the more the odds shift to the casinos favor and they eventually will take all the gamblers money.This book is about the casino paradigm as it relates to trading. The majority of Rich Traders operate like casinos. They trade with back tested proven trading systems that put the odds on their side. They risk small amounts of equity per trade like 1% to 2% of their accounts, so one trade alone really doesn't matter. While New Traders act more like gamblers with no real advantage and just plunging large bets on stocks so haphazardly that they just have a 50-50 shot like a roulette wheel on red or black. Many times the New Trader like the gambler has even worst odds by buying into the market in a downtrend and shorting into a rally just believing that they can pick the bottom or top.This book is about becoming the casino through the removal of emotions from any one trading outcome, risk management, and a positive expectancy model, which are the basis to any trader winning in the long term.We should control our risk just like casinos set table limits to not expose themselves to the risk of ruin.We must have the discipline to stick unwaveringly to positive expectancy models and risk management, casinos do not get upset and change their rules trying to win back money from a gambler and neither should we.Luck is what gamblers hope for. Casino operators consistently play the probabilities and manage risk.Trade the market not the money. Trading must be based on a trading system of entries and exits, not how much we want to make or how much we have lost in the past.Do not anticipate a signal take it only when it is hit, discipline always.Stick with your historically proven trading system, casinos do not close down if gamblers get on a winning streak.Truly a great book with a great analogy, the principles of winning in the markets are spot on and are easy to understand when linked to what many readers should be familiar with:casinos and how they take our money. If we can't beat them, let's be one our self.

I have read numerous books and have traded for sometime..The only way for anyone to make it in trading is to have the Casino mentality. 1) Must be well capitalized, all Casinos are Giants when it comes to capital 2) Use Positive Expectancy trading Models , the house has a little edge (not much) and 3) Systematic and controlled risk management...Just like a casino.The authors nails it on the head...Well written..real not imaginative advice and analysis...Highly recommended