Psychologist Van K. Tharp is an internationally acclaimed trading coach and author, focusing on helping traders who want to understand the psychology behind position sizing, systems development and general trader psyche. He is the only trader to ever write book that covers positions trading as a risky proposition in detail and he is also the only coach to be featured in Jack Schwager’s ‘Market Wizards: Interviews With Great Traders’.

Biography

There is very little biographical information on Tharp who has maintained privacy in his life even through his popularity as a trading coach. He received his doctorate in psychology in 1975 from the University of Oklahoma Health Science Center and he also holds numerous certifications including Master Practitioner of Neuro Linguistic Programming (NLP), Modeler of NLP, Assistant Trainer of NLP and Master Time Line Therapist. He uses these certificates and his training as a psychologist in his training and coaching methods. There is no information available on whether or not Tharp has done any trading of his own.

Claim to Fame

Tharp is unique in his profession and is considered the internationally recognized leader of trading coaching. He has been helping new traders since 1982 in becoming the best they can, sharing his unique strategies with his students. Many of the successful traders of today have been students of Tharp’s. He is also the president and founder of the Van Tharp Institute which offers traders training in system development and trading psychology.

Why was he successful?

With over 5,000 profiles of successful trading in his arsenal that include traders and well known transactions, Van K. Tharp has dedicated his career to researching and studying the industry. With these case studies he has been able to develop a technique for successful training and investing that he teaches through his Van Tharp Institute and lectures.
The technique Tharp has developed includes a five volume home study course called ‘Peak Performance’ which covers everything he researched and studied over a ten year period. His training sessions also include ‘The Investment Psychology Inventory Profile’ that aids in understanding the strengths and weaknesses in a trade or investment, a guide to position sizing, a course on developing a trading system and many other publications all designed to help anyone new to the industry.
Van K. Tharp’s expertise is in finance as well as psychology and his study has helped him determine what has made investors of the past successful.

Publications

Van K. Tharp has published numerous articles in magazines including:
* Barron’s Market Week
* Forbes
* Trader’s Journal
* Technical Analysis of Stocks and Commodities
* Investor’s Business Daily
* Futures and Options World.
His books on investment and trading have been published across the world in numerous languages including German. They include:
* Trade Your Way To Financial Freedom
* Safe Strategies for Financial Freedom
* Financial Freedom Through Electronic Day Trading
Tharp’s other publications include his home study courses on becoming a financial trader and investor as well as two newsletters that are released on a regular basis through subscription.

There are very few people in the stock trading and investment industry that are able to make money with little to no formal financial education. Jesse Livermore was one of those few. Before his death he had gained and lost millions of dollars, speculating and trading for more than 50 years. He also developed some financial ideas and principles that are still used by investors.

Biography

Born in 1877 in South Acton, Massachusetts, Jesse Livermore came from a farming family and never had any formal financial education. He left home with the hopes of escaping the faming life and started his long career as an investor and trader with Paine Webber, a well known and respected brokerage firms. His first job was posting stock quotes.
At the age of fifteen, Livermore began to trade stocks for himself, gaining over $1,000 in his trades. This was a lot of money during those early years of stock trading. He made a name for himself betting against the ‘bucket shops’. These were trading firms that did not make legitimate stock trades, allowing their customers to bet against the current stock price movements. Livermore was so successful that he was eventually banned from the bucket shops in the city of Boston, forcing him to move to New York when he was twenty.
Livermore continued his unusual trading techniques on Wall Street, his speculations gaining and losing him money. He became a known name throughout the world and at one time was extremely wealthy. However in 1940 he committed suicide at the age of 63, unable to handle the financial roller coaster he had been on for so many years.

Claim to Fame

Livermore’s technique of buying and selling stocks made him a highly visible person in the industry. Through his career of almost fifty years he gained and lost numerous multimillion dollar fortunes.

Why was he successful?

One of the reasons Livermore found success in the financial market was the fact that he learned not only from other successful traders but also from those that lost money speculating. Even though he was self-made as a trader with no formal education, he still developed principles that are used in the industry today.
Livermore gained his fortunes by applying these principles to all of his speculations. He firmly believed that one has to look at the whole market and not just individual stocks in order to determine where the market is headed. Traders need to have an exit strategy ready and that they should use a buy and hold strategy when there is a bull market and to sell when the market slows down. He felt that studying the fundamentals of a company was important especially when applied to the overall economy and current stock market. Unsuccessful traders didn’t put enough effort into research. Investors need to look at the long term investment in order to retain their capital and insider information needs to be ignored. The successful trader will use reliable sources. Finally, Livermore emphasized that all traders need to embrace change when it came to the way the market evolved.

Publications

Jesse Livermore authored and contributed to the following books on investment and trading:
* "How to Trade in Stocks” by Jesse Livermore (1940)
* "Reminiscences of a Stock Operator" by Edwin Lefevre (1923)
* "Jesse Livermore – Speculator King" by Paul Sarnoff (1985).
* "Trade Like Jesse Livermore" by Richard Smitten(2004).

Benjamin Graham is considered a legend in the stock trading and investing industry. He was an excellent financial educator, investment manager and author. Even today, thirty-three years after his death, two of Graham’s investment books are still used at the university level in financial investing classes.

Biography

Born in London in 1894, Graham was one years old when his family immigrated to the US. He was raised in Brooklyn and Manhattan during a time of economic hardship, losing his father at the age of nine. It was at this point that the young Graham became obsessed with obtaining financial security for himself and his family. As soon as he graduated from Columbia University he got a job on Wall Street with Newburger, Henderson & Loeb. He started as messenger for the firm and within six years worked his way into a partnership with the company.
In 1926 he and Jerome Newman started their own investment partnership and he became a regular lecturer at his alma mater of Columbia University. He lectured on finance until he retired in 1956. Three years after he formed the partnership with Newman, Graham lost everything in the 1929 stock market debacle. The firm eventually turned the corner by surviving, gaining experience from the lesson it learned. When Graham retired in 1956 the partnership was dissolved at 17% average return annually. Graham passed away in 1976.

Claim to Fame

Graham is looked at as the father of value investing and security analysis, two fundamental disciplines in the investing industry. He was also looked on as an important ‘thinker’ in the industry when it came to portfolio investment, developing it from what was considered an art to a disciplined science.
In addition to his work in the stock trading field, Graham was also the mentor to well known stock trader of today Warren Buffet in addition to other well known names in the field.

Why was he successful?

It is hard to outline Graham’s very detailed investment strategy. He felt that any investor should thoroughly analyze the investment they were considering and that it should give them more than what it would cost. He made it a point to look for companies that had solid financial fundamentals or had very little debt and a good cash flow with above average returns to invest in.
The term ‘margin of safety’ was first used by Graham to describe companies who were undervalued with low stock prices but sound fundamentals. According to Graham, it was the difference between a stock’s cost price and the intrinsic value it held. The larger the margin, the safer the stock and the overall investment. He also strongly believed that stock prices were usually wrong and that smart investors should buy judiciously when their is a sharp fall in price and sell judiciously when the price rises.

Publications

Graham was the author of the following books on stock trading and investment:
* "Security Analysis" (1934) by Benjamin Graham and David Dodd
* "The Intelligent Investor" by Benjamin Graham (1949)
* "Benjamin Graham: The Memoirs Of The Dean Of Wall Street" by Benjamin Graham and Seymour Chatman (editor) (1996)
* "Benjamin Graham On Value Investing: Lessons From The Dean Of Wall Street" by Janet Lowe (1999)