Originally written by Arthur L. Simpson in 1997, documenting conversations with an anonymous master trader from the Chicago trading pits.
The original book was a 110-page mess of wisdom buried in outdated technical details.
Tom Hougaard (Trader Tom), a massively successful trader, edited it down to 41 pages of PURE ESSENTIAL LESSONS -- the trading wisdom that actually matters in 2026.
Why 90% of Traders Fail:
Successful Trading isn't about finding the perfect entry signal, chart analysis, technical indicators or having a "secret strategy."
Trading is a LOSER'S GAME -- and the best loser wins.
Most traders sell winners too early, hold losers too long, and lose money. The Phantom understood something different: Success comes from losing correctly. And maximizing winners.
If you want to stop losing: Stop doing what the losing 90% do.
RULE #1: Assume You're Wrong Until Proven Right
Most traders assume they're right and wait for the market to prove them wrong. By then, it's too late and the loss is significant.
The Phantom's approach: Remove positions immediately unless the market PROVES you correct. Don't let the market tell you you're wrong -- YOU tell yourself you're wrong, early and fast.
This single shift keeps losses small and keeps you in the game long enough to catch the big winners.
"In a losing game such as trading, we shall start against the majority and assume we are wrong until proven correct! Positions established must be reduced and removed until or unless the market proves the position correct!"
RULE #2: Add To Winners
This is where you actually MAKE money.
Most traders SELL too early and DECREASE their position on winners because of FEAR of losing what they've gained.
You should actually ADD to a winning position as long as it's still going up!
The Phantom's strategy:
- Start with only PART of your intended position
- If the market proves you right, ADD to the position in smaller increments
- This way you're BIGGEST when you're RIGHT
Without Rule #2, trading becomes a 50/50 game at best. You need bigger positions on your winners to overcome the inevitable small losses.
"You will become the best trader you can be by being wrong small, not right small! You must press your winners if you really consider yourself able to make a living from trading. Otherwise, face the truth that you are only playing to break even."
What Makes This Book Different
This isn't about chart patterns or indicators. It's about BEHAVIOR MODIFICATION -- training yourself to do what's uncomfortable (cutting losses fast, pressing winners) until it becomes second nature.
The Phantom understood that trading success comes from:
- Controlling what you CAN control (your entries and exits)
- Accepting what you CAN'T control (market direction)
- Training yourself to do what the market is telling you, which may feel wrong but IS the right strategy for overall longterm success.
"It has taken years to understand that being wrong is what trading is all about. The best loser wins. If emotion is in your trade, it is a wrong position. Remove it immediately."
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41 pages that could change how you trade forever.