Trading the Plan should prove of interest and value to stock traders. However, the principles discussed should be heeded by traders of futures and options as well. The author is Robert Deel, a portfolio manager for a private money management firm, who also conducts training seminars on technical analysis and tactical trading for professional traders, brokers and financial planners.

The book's primary focus is risk control and money management, a subject about which there is precious little written, especially in terms easily understood and employed by ordinary investors as opposed to those at the institutional level. The substrata of this book are threefold: Losses are inevitable, losses must be controlled, and losses must be viewed with equanimity as the cost of doing business. Robert presents methods for actualizing the control of losses, so profits can accrue as a natural consequence of appropriate trading.

A number of self-assessment tests are included that will aid the reader in assessing his or her own investment profile. These and other tools provided enable the reader to tailor a strategy and investment approach that fits his or her own specific needs, goal and risk tolerance.

Six chapters are devoted to the practical exigencies that surround the subject, “How to Trade”. It is done in engagingly simple terms. The author covers the practical questions that underlie the preparation for a trade and the specifics of entry technique and stop placement.

The strength of the book lies in its treatment of the assessment and control of risk. Robert approaches the problem via several unusual avenues. An example of these is a test that the reader can use to assess his or her level of trading competence in definitive terms.

The result of this survey is a central factor in some of the discussions that follow. The results of the survey show you how your risk tolerance ties into the decisions you make about such matters as the allocation of funds and the size of trades. This, in turn, relates directly to the amount of leverage a trader can use and, hence, the kind of trading vehicles he or she should employ.

A number of concepts and rules, as well as lists of advice, are provided. If followed, they would doubtless save any trader, regardless of experience, much grief and money. An example: It is not possible to overstate the importance of the concept of being “value neutral” toward one’s capital and regarding money as a tool, thus removing much of the emotional content from a trading decision.

Another: The section that deals with the mathematics of risk formalizes and explains one of the most important and least appreciated facts of trading -- that it is critical to lose as little money as possible. Although this fact sounds simple, it is of utmost importance and, oddly, is often ignored. In covering this concept, Deel states what the maximum drawdown of initial capital should be.

Robert also details the difference between drawdown and maximum drawdown. He provides a step-by-step method for computing drawdown and using it critically in planning trades. Tangentially, he also shows how to plan money management strategy on the basis of estimated loss, a methodology very few traders consider.

The author comes to some conclusions that are at odds with others' findings. An example: Curtis Arnold will doubtless be amazed to know that the symmetrical triangle is “less statistically reliable” than other triangles. Arnold's research has revealed it to be the most reliable of all. Perhaps, however, I am misinterpreting Deel’s use of “statistically reliable.”

Trading the Plan should prove of interest and value to the appropriate audience.