What I Learned Losing a Million Dollars

What I Learned Losing a Million Dollars (Hardcover)
by Jim Paul (Author), Brendan Moynihan (Author)

Jim Paul ( ???? ----- Sep. 11, 2001) perished in September 11, 2001 in 1 World Trade Center.  He wrote the book which depict his life and trade.  That is incredible for both the book he wrote and the biggest even he perished in. I call it as American tragity.   Let us pray for him laying peace in heaven.


ISBN: 0963579495, ISBN13: 9780963579492, 190 pages, hardback,
published by USA Import, 1994

Description of What I Learned Losing a Million Dollars
What I Learned Losing A Million Dollars is a fascinating, easy-to-read and fast- paced true story of a commodity trader's meteoric rise from poor country boy to jet-setting millionaire and Governor of the Chicago Mercantile Exchange. And, it is an insightful examination of the lessons he learned from the harrowing million dollar loss in the market which brought him crashing down.

From anecdotes that are by turn amusing and hair- raising, you will vicariously experience this trader's roller coaster ride from poorhouse to penthouse and back again. After the ride the authors show you how to identify and manage the risks, both monetary and emotional, inherent in decision- making; regardless of whether you are an investor, trader, entrepreneur, manager or CEO.

You will learn:

- The three biggest mistakes investors and traders make and how to avoid them.

- Why the most important part of making money is not losing it.

- The patter which all losses take, regardless of whether the loss is $1,000 or $10,000,000.

- How to take losses before they take you.

Contents

Part 1: Reminiscences of a Trader

1. From Hunger

2. To the Real World

3. Wood That I Would Trade

4. Spectacular Speculator

5. The Quest

Part 2: Lessons Learned

6. The Psychological Dynamics of Loss

7. The Psychological Fallacies of Risk

8. The Psychological Crowd

Part 3: Trying It All Together

9. Rules, Tools and Fools

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'What I learned Losing A Million Dollars is an entertaining personal experience as well as a serious psychological analysis of a trader. Since psychology plays an inordinate role in successful trading, this book provides insights and lessons that are invaluable to all traders. I highly recommend reading this book.'
Leo Melamed

'What I Learned Losing A Million Dollars delivers what its refreshing title promises - an honest account, an entertaining road, and market truths made more memorable by colorful anecdotes and war stories. Worthwhile reading for those who don't believe in a holy grail in the markets; must reading for those who do.'
Jack Schwager

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This book by Jim Paul and Brendan Moynihan is a book any trader should read – The book correctly states that there are lots of different ways to make money and only a few ways to lose it. Therefore you need to concentrate on not losing first

If you have not read this book you will see the markets in a completely different light and one that could lead you to bigger profits and is simply one of the best investment books ever writtten.

What I Learned Losing a Million Dollars is a fascinating, insightful, easy-to-read true story of Jim Paul’s rise from a humble country background to jet-setting millionaire trader and Governor of the Chicago Mercantile Exchange.

It is an examination of the lessons he learned from losing a million dollars in the market which brought about his demise and then covers his rise from the ashes.

This book contains no technical theories and really focuses on how NOT To lose money – there are plenty of ways to make money so how come most traders lose it?

The answer lies as we have stated that:

It’s not how you make money that’s important there are many ways to do that, but are only a few ways to lose it and if you are mindful of them and don’t make losing mistakes - you can emerge a winner.

The book is essentially divided into two parts:

Section 1

The first half of the book about Jim’s life makes you feel close to him and the experience he is facing as his world crashes around him. It’s both funny and sad in equal measure and is a superb fiction story.

Section 2

After the loss and its aftermath, comes the authors views of what he had learned and this really is original, thought provoking and insightful. The authors show you how to identify and manage the risks, both monetary and emotional that is part of any decision making including trading.

Playing great defense

The authors covers the key areas ALL losing traders fail in, that let losses get out of control.

Key areas covered are:

- The three biggest mistakes traders make and how to avoid them.

- Why the most important part of building wealth is not losing it.

- The psychological pattern which all losses take in a traders head, regardless of the position size

The discussion on the risk/reward ratio, and why most other books get it wrong is perhaps the most interesting part of the book.

This point is worth the books price alone as the aothor explains

Why you have to take into account the PROBABILITY of return, and PROBABILITY of loss, when trading and not simply divide the size of your expected return by the size of your expected loss, as most authors suggest – if you do you will lose!

This really is the key point of the book if you want to keep losses under control as it states in the preface.

“This book is a case study of the classic tale of countless entrepreneurs: the risk taker who sees an opportunity, the idea that clicks the intoxicating growth, the errors and the collapse. Our case is that of a trader, but as with all case studies and parables the lessons can be applied to a great many other situations.

If you want a book to show you the importance of emotional discipline and the art of risk management, then this is it.

This book has recently gone out of print, so get your hands on a second hand copy or get to the library and read it.

A word of warning: there's nothing about indicators/setups/technical analysis/trading techniques in this book -- just what the cover says, thoughts on the causes of losses in the market.

One of the profound things I found in the book is discussion on the risk/reward ratio, and why most other books get it wrong. The author claims he doesn't understand math, yet gives a great explanation why you have to take into account the PROBABILITY of return, and PROBABILITY of loss, otherwise you're just fooling yourself. If you simply divide the size of your expected return by the size of your expected loss, as many other authors suggest, lottery would be the best investment (risk $1, return $1 mil.)
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This book should be required reading for anyone who thinks they "wanna trade like the pros" and become a full-time financial markets trader. This book makes it clear that most people don't lose because of what the market does but because of how they respond to the markets ... and how they handle losing trades.

Jim Paul's realization that there are countless ways to make money in financial markets and only a few ways to lose it is very insightful and though provoking. Read it again and again.
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This book was recommended to me by another trader. I'm glad I picked it up. There are enough books out there that tell us how they make money...but too few tell us how to avoid losing it. This book is a must read! All the mistakes that we as traders make are outlined, explained, and amusingly told in this book that I fear too few traders have read.

The book makes you feel that you could have travelled the same road as the author which brings it home all the more powerfully.

The lessons are not just conceptual or psycho-babble. These are applicable lessons that you can use in your own trading as soon as you put down the book. The approach and an awareness that this book gives you helps you understand you do the things you do.

Again, this is not an outline of how to trade. These are important lessons about how we accept a trading loss, how to analyze losing trades, and finally how each of us can be tempted to rationalize losses.

A great book!

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Book review
http://www.allbusiness.com/specialty-businesses/482827-1.html

What I Learned Losing a Million Dollars.
By Banfield, Eric-Charles
Publication: Futures (Cedar Falls, Iowa)
Date: Tuesday, November 1 1994
Subject: Book reviews

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From golf caddie to millionaire trader, Jim Paul figured he had "the Midas touch." Unwilling to ascribe his success to luck, he simply believed he was better than everyone else at making money.

He lost it all in 75 days. So, instead of relearning

how to make money, Paul began studying how to lose, and learning about the psychology of risk and loss. Now he shares his lessons.

What I Learned starts with Paul's entertaining yet harrowing life story. In the second half, co-author Moynihan provides the intellectual context. Reviewing the story, the two analyze not what traders do, but how they think about risk, manage losses, and distinguish performance from self-worth.

The result is a fun read that may undercut the market for "get-rich-by-trading" books. As many suspect, advice from "the pros" is wildly conflicting. Everyone's method differs. For each expert peddling diversification, shorting, averaging-down or spreading-up, another advocates the opposite.

The only thing common among good traders is the ability to develop a plan and stick to it, setting firm exit parameters. That is, plan to control losses -- they will occur. Or else you'll find yourself denying the position is moving against you. You'll be angry at the market -- it's "wrong." You'll pray just to get back to breakeven. You'll fall into depression. You won't accept reality until the clearer closes you out.

Paul exhibited all those "Five Stages of Loss" as his soybean position crumbled.

The book spares readers of equations, including just one "flow chart" diagram linking the concepts. Paul and Moynihan at one point lapse into strained distinctions among gambling, betting and speculating. But at least they make the distinctions. Several traders can't tell an arb from a spread.

The authors include many supporting quotes and anecdotes from traders, philosophers and decision makers. I'd recommend the book to anyone who's suffered any episode or pattern of serious loss, financial or not.

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The Psychological Dynamics of Loss, May 30, 2002
By  Christopher G. Roche (Weehawken, NJ United States) - See all my reviews

The title of this review is a chapter in Jim's book. I bought this book after Jim passed away on September 11, 2001 in 1 World Trade Center. He told us about this book in 1997, and I was so glad it was still in print. It is an excellent book, and it is written by an extraordinary individual. When I met Jim I could tell he was amazing, and his personality comes through in this work, which is part autobiography and part trading treatise. Jim's rise and fall and subsequent rise again makes for an incredible story, and his insight into the markets are superb. Even if you are not interested in the market, this book is worth purchasing just to learn more about Jim's amazing life story. Jim is candid, funny and dynamic in this work. I wish the world had more people like Jim Paul and more books like "What I learned While Losing a Million Dollars."

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A captivating life story of a real person who lost a million and a half bucks, with the conclusions he made from it. The first half -- about the guy's life -- reads like a superb fiction story. Not extremely educational in terms of trading per se, but a lot of fun to read. The second is a thorough and insightful analysis of the psychology of losing -- product of both the authors own experience and his studies afterwards. Quite a few deep thoughts.