I don’t know if John Carter had the same English teachers I did, but I do know that he understood the advice they always gave me: Be specific.  That is exactly what he does in his new book, ‘Mastering the Trade’. In a hefty 21 chapters, Carter squeezes in everything from how to catch intraday moves to setups to business plans.

However, it is not simply a dense text designed to highlight the expertise of the author and amaze readers. Every bit of it offers realistically usable advice and methods.  It opens in the way most trading books do, with discussion on market movement basics, advice on how to read the market and a little psychology thrown in for good measure.

Although all of this information is essential, most interesting is the fact that Carter astutely includes information on hardware and software required to trade online. As is characteristic of the entire book, he details all of the components of an electronic trading system, from a computer’s memory and speed to the number of monitors a trader should have. He even goes so far as to recommend spyware removal programs so that your computer will not be slowed down by what he aptly describes as “crud.”

The bulk of Carter’s book comprises a dozen trade setups, each one given its own chapter. They include more common setups such as the squeeze play and the box play, as well as setups specific to Carter’s trading style such as the 3:52 play, an end of day trade.

Each setup chapter is formulaically presented.  Carter briefly describes each setup and explains in which market he uses them. Next he lists the setup rules, carefully numbered one by one, and then explains his actions in each trade, also numbered carefully, step 1, step 2 and so on. And of course, as with any good day-trading book, the details of each trade are accompanied by a chart. Because every rule and action in these chapters is so meticulously laid out, these sections provide a great reference for readers.

Next he explains how to create a trading plan. He shares his 2005 trading plan, which is so detailed it’s almost dizzying. After looking at it, any reader can understand why many amateur traders throw in the towel on trading plans and choose to rely on their instincts. But, as Carter demonstrates, there are no shortcuts. Also eye-opening is the trading plan of a fellow trader—complete with Carter’s very specific comments.

The trader wrote into his trading plan a scale by which to judge his trading: “5: target hit; 4: out at a different price but profitable (time stop); 3: out at even; 2: out at different price from stop, but a losing trade (time stop hit); stop hit: 1.” This scale seems detailed enough, right? Not for John Carter.

He suggests to this trader that he should also consider scoring himself on how well he followed his plan, giving the lowest score to an impulse trade. This is in addition to keeping a trading journal!

Such a detailed example gives the reader the chance to see what he or she may be doing wrong when creating a trading plan. Too often authors give advice on how to create a trading plan without offering solid examples of what a plan should look like, leaving traders to rely on their instincts. 

As any trader who has mistakenly followed his gut into or out of a trade can attest, it’s all in the details, from your office to your trade setups to your plan. But if you’re uncertain about which details to study, pick up this book. John Carter has detailed it all.

Book review by Elizabeth Thompson