The Universal Tactics of Successful Trend Trading (click to see price) is a companion to The Universal Principles of Successful Trend Trading: Essential Knowledge for All Traders in All Markets, which originally established Brent Penfold as a widely-read author of technical analysis books.
Brent is an ex-professional futures trader of forex, commodities and other indices. He’s the face and director of the Australian trading newsletter and advisory firm Brent Penfold Futures Pty Ltd which can be found at indextrader.com.au.
Brent has written three titles to date, all published by Wiley under their Wiley Trading Advantage imprint. We’ll begin this review with a quick overview of Brent’s works to help give context to this new companion title.
An overview of Brent Penfold’s complete published works
- Trading the SPI: A Guide to Trading Index Futures in Australia – 2005
Brent’s nascent writing career began with Trading the SPI, an Australian traders introductory guide for other Australian futures traders. Aimed at both beginner and intermediate traders, the goal of Trading the SPI was to share twenty years of trading experience with the next generation of traders.
The title covers topics such as preparing to make a trade, treasury management, investing psychology and both discretionary and mechanical trading approaches.
Trading the SPI isn’t available from online retailers such as Amazon, however, you can order it direct from the publisher under their print on demand service here.
- The Universal Principles of Successful Trend Trading: Essential Knowledge for All Traders in All Markets – 2010
The Universal Principles of Successful Trend Trading was Brent’s broader follow-up title. Being a book aimed at a wider, more international audience, it saw higher sales and critical acclaim. It currently holds an enviable 4.2 / 5.0 rating on GoodReads which is high for a day trading book.
Trader and author Stephen Burns had only positive things to say about The Universal Principles on his blog one year after publication:
“Once you are through the rainbow and butterfly phase of trading and realize that you will not be a millionaire in a year, this book will help you get focused and get serious about your trading and what really works.”
This review was syndicated on Business Insider and was crucial in getting the word out about a new international trading author on the scene and providing an outline of Brent’s six universal principles:
- Trading style
- Selecting markets
- The three pillars: money management, methodology, psychology
- Trading (assembling the principles)
If you fancy gaining a flying headstart on trend trading, this title is still in print and can be purchased online from Amazon, check the price here.
- The Universal Tactics of Successful Trend Trading: Finding Opportunity in Uncertainty
This title is the subject of today’s review. So let’s get to the main event!
Review of The Universal Tactics of Successful Trend Trading
Brent has never hidden behind positive platitudes. The authors of some of the best day trading books or forex trading books sometimes build unrealistic expectations in the mind of their readership. Success in day trading is rare and a statistic that Brent loves to repeat is that 90% of day traders fail to turn a profit over the long term.
The truth is that day trading is difficult, and a beginners guide to day trading isn’t a sufficient factor to guarantee success. Heck, Brent spends the opener of the book trying to put off investors who don’t have a suitable mindset or expectation to persist with trend trading long enough to see it yield fruit.
Could you weather a pattern of trading that sees you lose 20 trades in a row? If not, then trend trading might not be for you. Brent suggests that even a ‘good’ success rate when trend trading is 33%.
Brent explains that ample scientific research exists which demonstrates the overwhelming long term performance of trend trading. But this doesn’t mean that traders are protected from losses. To the contrary, a trader will make many small and many larger losses along the way. Whether they’re using the ‘Ricardo rules’ or the ‘Dreyfus 52-week rule’ approach.
So what are the universal tactics of successful trend trading? If you were expecting a listicle, you may be disappointed! The universal tactics aren’t a neat list of ‘5 tactics’, insomuch as an entire volume of tactics, grouped into chapters.
This book will set out a compelling case for trend trading, and highlight many of the advantages of sticking to a trend trade plan:
- No need to second-guess the market
- No need to make complex macroeconomic predictions
- No need to win every trade
- No need to specialise in a single market
- No need to stick to long positions
Technical analysis books tend to feature an overload of charts and data tables. The Universal Tactics is a pleasant exception. The emphasis is on advice and explanations rather than an overwhelming number of figures.
This book is the practical companion to The Universal Principles, in the sense that it dwells upon the steps taken to develop a real trading strategy. The Universal Principles built the fundamental infrastructure, the necessary context within which a trader operates. The Universal Tactics provides a turn-key guide to creating and tweaking a trend-following approach that takes advantage of that market structure.
Brent commands the topic of technical trend trading in a way few authors do. He writes with wit, and at times a stern but encouraging voice. After reading, it’s difficult to imagine how else to instil the discipline and mental fortitude needed to survive a year as a trend trader.
I recommend that The Universal Tactics of Trend Trading is purchased alongside its bestselling brethren The Universal Principles of Trend Trading as a pair, and read in their order of publication so that the practical detail follows the theory.