Book Review: Exploding The Myths

Book Review: Exploding the Myths - What your broker doesn't know or won't tell you!,
By Frank Watkins - $29.95 GST

Right from the beginning, this book started changing my perception and beliefs on share trading. I found myself starting to get enthusiastic about the prospect of share trading. What brought this change was the author’s refreshingly simple philosophy and methodologies, giving me “hope” that maybe share trading isn’t out of the realms of the everyday person.

The author sheds light on and offers his viewpoint on some of the common sharemarket myths we regard as true. His approach versus a brokers approach is clearly contrasting and embellished on in the chapter “Investment Myths”. This chapter covers such commonly held opinions as:

1. Time in the market is more important than timing the market
2. Diversify or perish
3. Set up a “Blue Chip” portfolio
4. You can’t make money in a bear market
5. You can’t go broke taking a profit
6. Buying cheap

A good chunk of the book covers the technical analysis of shares. This is done through analysing by the way of charts/graphs. The book goes into detail about the buy signals to look for to indicate a potential buy and the other indicators to look for to confirm your buy signals. In this way, a combination of signals and indicators are required before a purchase is considered.

Although the buy signals and indicators were clearly laid out with lots of charts as examples and explained simply, towards the end of this section of the book it all got a bit much – causing confusion between the various signals and indicators and their names and generally giving me a bit of a “brain overload". This is probably why the author recommends reading the book more than once.

The book also goes into other subjects such as:
1. Defining your entry and exit strategies
2. Money management
3. Insuring your investment
4. What you hear versus what you see about a stock
5. Getting started in share trading

This book just makes so much sense and is that way throughout. It highlighted to me immediately why novice investors fall into the same trap, because of our lack of financial education, or our programming by the broking industry – as the author comments “Don’t expect to get an education from the broking industry. It does not existing for that purpose. It is there to take a commission or a management fee from you.”

Prior to reading this book, I believed share trading to be too complicated, too difficult to understand and too time consuming to want to actively pursue. This book has really simplified what I believed to be a complicated subject. It has given me the inclination to become more of an active investor rather than a passive one. I feel I now have the confidence to take this into my own hands, to educate myself and to eventually be profitable at share trading.

In the Authors own words:

“This book will give you a different perspective on how the market works and on what is required for trading success.”

To buy ‘ Exploding the Myths' priced at $29.95 GST incl from Good Returns click here.

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