Winner Take All

by William R. Gallacher

Book Overview

The futures industry is unique, entertaining and, for far too many people, ultimately heartbreaking. What other industry possesses such an entertaining cast of soothsayers, self-proclaimed experts and charlatans? Where else do people become fabulously wealthy simply by acting on their own convictions? And where else does the possibility of failure loom so large and so constant? No other book captures the essence of the futures industry better than...

• Format: Hardcover
• Language: English
• ISBN: 1557385335
• ISBN13: 9781557385338
• Release Date: December 1993
• Publisher: Irwin Professional Publishing
• Length: 264 Pages
• Weight: 1.25 lbs.
• Dimensions: 0.9" x 6.5" x 9.3"

Customer Reviews

Extremely Informative

I have hundred of books on the markets and this is one of the best. Gallacher debunks many falsehoods in the futures markets and, quite frankly, after reading the book one is uncertain whether or not trading futures makes any sense at all. That having been said, this book has things about money management that you will not find anywhere else. Gallacher swings his sledgehammer at Ralph Vince's "Optimal f" as well as money management systems involving fixed percentages of capital. Although I did not agree with some of Gallacher's conclusions, this is a well-written book that no serious student of the markets should be without.

Must have for systems traders

Two hundred pages into "Winner Take All", you'll find Gallacher dissecting Ralph Vince's optimal F strategy for position sizing, pointing out the obvious ways in which it can result in dangerous levels of overtrading that can put you out of business. At the end is an illustration of a trader aiming a gun at his own head and blowing his brains out, with the caption "optimally f'd". While it sounds kind of tasteless written down this way, when I came across it the first time I was laughing so hard I had to put the book down and catch my breath for a minute. That's the sort of work you'll find throughout this very contrarian text whose nominal focus is on commodities trading. The scathing commentary wouldn't be so helpful were it just being sensationalist, but the analysis throughout this book is spot on in addition to being extremely funny at times. While Gallacher's coverage of commodities is solid, albeit fairly pedestrian, his discussion of trading gurus is simultaneously informative, entertaining, and controversial. Ralph Vince gets off pretty easy compared with how other revered industry fellows are lampooned. You'll find plenty of dirt on popular trading role models like John Murphy, W. D. Gann, Elliot, Larry Williams, Richard Dennis (and the turtles), Bruce Babcock, and Welles Wilder (not to mention a thoroughly deserved bashing of Neural Networks). Anyone who is following techniques proposed by those gentleman should consider reading "Winner Take All" just to make sure you're seasoning their claims with a healthy enough skepticism. As other reviews here claim, Gallacher may be doing his own manipulation on the data in order to prove his own points in this area, and you'd be wise to apply the same level of skepticism he brings to other figures to his own claims. Very interesting reading, and written in a thoroughly enjoyable style. The centerpiece of the book is one of the most real-world discussions of an working trading system I've found. A standard trend-following breakout system is presented and shown to make 385% annually; pretty good, right? It's then shown rather realistically how commissions, slippage, and stop order issues will eat into that. Then, he analyzes the real capital required to actually run that system through its expected drawdowns. When it's all done, that magic winning system is lucky to hit 17% across the amount of capital actually required to run it. Having built multiple trading systems myself with multi-hundred percent per year predicted results that actually lost money once the entirety of actual trading and money management was factored in, I'm shocked that more books on trading systems don't cover this topic. Note that some of the things that really bash the profits in the examples down are specific to commodities (like the limit down/up problem), but stocks have their own issues that are of equal magnitude (in my own systems, I've noted that the bid/ask difference on stocks going through a break

Short, easy to read but truly excellent

This is one of the best of the hundreds of books I have read on investing.He systematically demolishes numerous myths about trading. For this reason some readers are likely to be upset by the book e.g. devotees of Elliot Waves, Gann's methods and other nonsense.The important topics are covered extremely well i.e. money management, what IS important, what is snake oil, some of the realities of trading such as slippage, why over 90% of traders lose all their money, etc.Most books on investing are thinly disguised marketing exercises. This one is different - the author is doing his best to share his hard earned learnings. An excellent investment.

The Truth

Gallacher proves himself to be an excellent critic and skeptic in this book, pointing out faults and errors in others. I would say that's of the most valuable part of the book. You can find pimping of products, and authors' positive features of their work in any book. Gallacher finally takes a critical look at some of the common methods out there, and gives you the negative side as well, and errors in logic. That's what makes this book worth reading. A few examples of people being "found out" are Larry Williams, Bruce Babcock, and W.D. Gann, not to mention some flaws in common techniques, like trendlines. I don't think he handled Elliot wave as good as he could have, though. Elliot's health and mental capacity was dwindling due to a disease (I forgot the name of the disease), and ended up dying in a hospital, and was finishing work on the Wave Principle as fast as he could before the disease finally took over. To simply say Elliot died in an insane asylum broke does not tell the whole story. Elliot Wave has plenty of flaws in it and is quite ridiculous, in my opinion, and could have been busted open better than this. This book is probably required reading for those who are new to the business, and expect to make a killing by reading about some new indicator or following a black box system. The book is ground in reality.I can see how some can have isssue with his remarks toward technical analysis. First, he shows how it's flawed. Then, in the next chapter and then on, he's showing how he uses it to help him trade. It's not a contradiction, really, and he's not being hypocritical. He uses different methods of TA than what he rips apart at the beginning of the book. Shows errors in optimal f also, and Artificial Intelligence. Even if you use TA and are a TA zealot, the book can probably help you still. I use TA extensively, and found the book insightful.

Reality Trading

"Winner Take All" is an excellent book. The author is an avowed fundamentalist, yet he does not discard the validity of technical analysis all together. He also exposes the "gurus" we so frequently hear about in the world of commodity trading. People should really ask themselves why anyone in his right mind would want to sell the perfect system or indicators. If they were really that good, they would use these tools only for themselves. William Gallacher deserves to be heard.