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“Hedge Fund Trading Secrets Revealed”: Book Review & Giveaway at Trader’s Narrative





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My last book giveaway was Tim Sykes book “An American Hedge Fund” so with this new book it seems we are continuing a “hedge fund” theme …

Hedge Fund Trading Secrets Revealed” by Robert ‘the Hawk’ Dorfman.

Hedge-Fund-Trading-SecretsDorfman runs the SilverHawk Fund out of Costa Rica and before that used to work for Jim Mellancamp of Genie One Capital Management. I couldn’t find much on Mellancamp or Genie One but I suppose most hedge funds are fairly secretive.

The first few chapters of the book tell the story of how Dorfman came from humble roots in Cranston, Rhode Island, thanks to a fight in a restaurant was able to attend Brown University and from there, discovered Wall Street.

If you are new to trading or investing, the book contains a lot of basic to intermediate information that you’ll find useful. I don’t think there are many “secrets” revealed about hedge funds, other than they know more and have more resources than the average retail trader.

Still even someone who is experienced and relatively knowledgeable will be able to pick up a few things here and there. For example, Dorfman talks about Thompson Financial’s AutEx, an institutional liquidity pool I wasn’t familiar with.

As well, he outlines his basic strategy:

“…we enter trades based on these institutional trading firms’ actions as reported by Thomson Financial’s incredible global, pre-trade execution and communications network called AutEx, which provides us with an in-depth view of the moves being made by over 800 institutional traders…”

His basic thesis is that “the price simply will not make a sustained move without the power of institutional buying or selling”. Which is hard to argue with. He describes in some detail how a hypthetical order from an institutional trader will be pounced on by others and result in the price being pushed against the order.

Unfortunately, there is a chapter devoted to the “Universal Law of Attraction“. I’m more than skeptical about this New Age phenomena. I don’t think it has any validity but the good news is that in this book it is only a small part and can be easily ignored.

Most importantly, there is significant portions of the book devoted to capital allocation and risk management. He talks about maximum position allocation (MPA) and describes how to calculate it. As well he discusses scaled entry for an order (that is increasing size as the trade goes your way). On the whole, while important, it is fairly basic stuff. If you are curious about similar topics of risk management and capital allocation, check out the “Way of the Turtle” by Curtis Faith.

Dorfman’s book will be a disappointment if you naively believe its title. But if you dedicated to learning more about trading and especially about how large institutional traders operate, you’ll pick up some good information.

If you would like the chance to receive a copy of Robert Dorfman’s book for free, drop me a comment below. Make sure you write your email correctly (so I can contact you in case you win the random draw!).

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49 Responses to ““Hedge Fund Trading Secrets Revealed”: Book Review & Giveaway”  

  1. 1 Brian Takeuchi

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    Its good to see more books on institutional trading and how they can move markets.

  2. 2 Henry Bee

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    Hello Babak, please include me in the draw!

  3. 3 saxo

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    looks like great book for starters

  4. 4 Batsum

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    new college grad looking to enhance my knowledge of trading and investing. Look forward to reading the book!

  5. 5 Hedge Fund Lawyer

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    This will be a good book for those just starting out in the industry. It would also be a good book for those who are launching a start up hedge fund.

  6. 6 George Hedge Fund wannabe

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    Babak, can’t wait to read the book on the true workings of a hedge fund. Love to know the real secrets of hedge funds.

  7. 7 Prospectus

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    I would love to know how they trade. Thanks for a great blog, Babak!

  8. 8 pej

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    If it’s good enough for Babak, it’s good enough for me!
    please include me in the draw as well :-)

  9. 9 john kemp

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    Enjoyed the article, please include me in the draw…..cheers Babak

  10. 10 Jiri Novotny

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    I’m a fan of your blog, the book looks interesting.

  11. 11 Enn

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    Looks like a sick book.

  12. 12 Manny

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    thanks for the review - appreciate the blog too. learning more from you blog than a lot of other sources.
    -mm

  13. 13 Purple Swan

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    Please include me in the draw….

  14. 14 diego joachin

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    Good blog. Good Posts. Nice Strategy to increase attendance. Thanks.

  15. 15 Alex

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    Does the maximum position allocation have anything to do with the Kelly Criterion? either way could you expand on Dorfman’s MPA? Thanks, and please include me in the draw also! I enjoy these book reviews; I just picked up An American Hedge Fund

    Alex

  16. 16 Babak

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    Alex, nope, not that complicated :)

    diego, yes, attendance is a must. otherwise we’ll have to send a note to your parents ;)

  17. 17 Markus

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    Everything still open?

    Thanks,
    Markus

  18. 18 piazzi

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    Please incluse me in the draw

  19. 19 Adam Grimes

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    good review. sounds like an interesting read….

  20. 20 Ed

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    Thanks for the write-up; please include me in the draw.

  21. 21 Zillionaire

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    Sure, sign me up. I’m always looking for good trading books.

    Great blog — keep up the good work.

  22. 22 Juan

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    Great site, I just recently discovered it. Please include me in the drawing!

  23. 23 milt tomkins

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    This book is great.. I was one of the original reviewres of this book….I was chosen at random as a previous customer at pristine Publishing….good to see it getting some attention.. I use 2 of the strategies described in the book and have been extremely successful.

  24. 24 jeff pierce

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    Count me in. I’m always looking for recommended reading to further my education. You never know when your going to find a nugget of information that can make you a mint.

  25. 25 mark

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    very interested to get my hands on this one. thanks babak!

  26. 26 Peter

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    Thanks!

  27. 27 Jake

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    pour it all into a pot and see what comes out - never stop reading and learning….thanks Babak

  28. 28 Stephan Buu

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    Please incluse me in the draw

  29. 29 C.Han

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    Sign me up!

  30. 30 nathan

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    Thanks for the chance!

  31. 31 Balin Butler

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    Please send me a copy.
    Thanks, Balin

  32. 32 jorge

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    I need oneĀ”

    Thanks

  33. 33 jp

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    Another one for me . great site …ty

  34. 34 Fredonia

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    Contrarian investing in today’s market may be huge profits in 2010.

  35. 35 ilias

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    thanks in advance

  36. 36 bacoco

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    Hello from Paris, please include me in the draw!

  37. 37 daniel juliano

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    could be a good read on strategies necessary even for retail types like me

  38. 38 daniel juliano

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    count me in on teh draw

  39. 39 Norman Eoff

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    Please include me in the drawing as well.

  40. 40 andy

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    Please include me in the drawing. Thank you!

  41. 41 Sebi

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    please send me a copy.

    thank you.

  42. 42 mark levine

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    NO WONDER I AM LOSING MONEY….I WANT TO KNOW THE SECRETS…PLEASE

  43. 43 claes

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    Pls include me in the draw!

  44. 44 Paul Seifert

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    I sure would like to win a free book.

  45. 45 ilias

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    thnks

    ilias

  46. 46 Justin Sarafin

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    The book sounds interesting. I work in the industry too. Cheers.

  47. 47 George Strell

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    appreciate your site, enjoy the technicals

  48. 48 Evan

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    Sign me up :-)

  49. 49 Vic

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    Nice! Here is hoping Lady Luck favors me :)