The Fortune Book Club Book Review: The Naked Trader
Title: The Naked Trader
Author: Robbie Burns
Publisher: Harriman House (Fifth edition)
Publication date: 16 September 2019
Robbie Burns, aka The Naked Trader, explains how anyone can make money trading shares with his comprehensive beginners guide to trading. With nearly £1.5 million made in just over a decade, Burns is a great poster-child for how to be a successful trader. He shares everything needed for beginners to get started from his do’s and dont’s to how to research and purchase your first share in his book The Naked Trader.
With a strong interest in personal finance and investing, but not yet having actually invested in anything due to a lack of practical knowledge, I decided that finding a decent book on the subject would be a good entry point. As such, I spent some time researching and came across The Naked Trader by Robbie Burns – an Amazon and Audible best seller.
After reading a somewhat awkward and overly colloquial introduction, I was left feeling regretful – had I just wasted the best part of £15? Determined to stick it through as always, however, I persevered and was soon beginning to come across the odd snippet of wisdom mixed in amongst a sea of bad jokes.
Having learnt the basics of the game, and how normal trading is nothing like any hollywood movie has ever depicted it to be, Burns then began to outline the reasons to stop reading and not get involved. Highlighting and explaining how confirmation bias, addiction and poor judgement could quite quickly lead you to be at least broke and at worst heavily in debt.
The honesty in these two sections hints at the integrity of the author. Robbie isn’t looking to cash in by getting readers to sign up to affiliate links. It’s actually quite the opposite – he would rather see you leave with your money intact and himself a reader down than to see you lose it all.
With the warnings out the way though, he quickly gets into the nitty gritty details of his successful trading approach. The next section covers how to research shares effectively and efficiently, warning signs to look out for, how to use stops to prevent big losses, the importance of exit strategies, common winning strategies, how events impact the market, common trading mistakes and real-life trading disasters. While these topics aren’t covered in extreme detail, enough information is shared to get beginners up to grips with common terms and approaches.
Burns then takes things further by covering ‘Level 2’ and more advanced techniques. While he advises that beginners stay away from these approaches to begin with, they are included to make the book a comprehensive guide to trading and something for newbies to aspire to. This section covers things like spread betting, shorting, commodity/forex trading, level 2, charts/technical analysis and SIPPs.
The Naked Trader then finishes with a round up of Robbie’s rules for trading, a brief FAQ and a somewhat unnecessary inclusion of a few random blog articles that have absolutely nothing to do with trading. A short quiz is also added to the end of the book to see how well you were paying attention, with your scores suggesting whether or not you’re ready to start trading. Unfortunately, while the premise of this final section is good, the execution is pretty poor because of the randomness of the blog articles. Why would I want to read a rant about seeing Fulham FC in a book about trading?
As such, the random blog posts, cringey jokes and colloquial tone, really takes away from the solid teaching and helpful market insight The Naked Trader offers. Although it’s clear that Robbie knows what he’s his characterful approach quickly became an annoyance. However, it was evidently an annoyance I was ultimately happy to tolerate, as I was pleased with the amount of knowledge I learnt in a relatively short and mostly jargon-free book. 4/5.
You will never learn to invest/trade without actually investing or trading yourself and the best way to improve is by finding your feet. However, you can use some of the following tips/tricks mentioned in The Naked Trader to help you on your way:
- Don’t buy and sell indices like the FTSE100 or DOW if you’re new to investing.
- Stay clear of forex and cryptocurrencies.
- Think about buying after black swan events such as natural disasters and terrorist attacks. They usually cause a downturn in the markets without actually impacting any of the associated businesses.
- Have an exit plan in place for every share, especially a get-out-quick for a recent purchase that is tanking hard.
- Use stops to prevent losses and trailing stops to secure profits, but take into account typical price fluctuations.
- Make use of ‘topslicing’ to secure at lease some profits.
- Never get involved with anything you don’t fully understand e.g. CFDs.
- Don’t overtrade.
- Don’t get overconfident (see above).
- Most importantly, stay calm and analytical.
- Trade Like A Shark – Robbie Burns
- The Naked Trader’s Guide To Spread Betting – Robbie Burns
- The Investor’s Guide To Charting – Alistair Blair
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