TraderNovice.com
Every individual making an effort to trade has spent many hours engrossed in the
text of any and every text that may help him or her learn to trade. Often the
This is a great book. As I was writing this short review I sat in my home office. I turned to my left searching for the correct comments and there on my wall was the following:
I had completely forgotten these comments were hung there years ago. It is summarized on page 185 of this book.
Mr. Douglas has written one of the all time great
I have made it clear in other areas of this website that there is much, much more to trading than being able to predict market behavior with relative consistency. Mr. Douglas has directed this book towards that "other", part of trading. In my mind, the most important part. This book is invaluable and I have read it countless times.
This book stresses some of the same principles as described above. It was Mr. Douglas' debut trading text and is a classic. This book describes the mental aspects of trading, explains how one is destined to fail if he does not posses the mental discipline necessary for successful trading, and then goes on to explain what can be done to obtain those skills. As in the review above, this book does not detail an approach for developing an "edge" (positive reward/risk ratio). you must do that on your own. But once you have that, this book is quite clear about what methods you might use to utilize that "edge" to take advantage of the markets.
Buy these two books
This is a very thorough primer on trading.The Circus, Misconceptions, Expectations, Fundamentals, Executions, Money Management, .....These are just a few of the chapters of this text. Mr. Gallacher takes a dim view of those who would seek to profit off of others via marketing and deception. He is clearly inclined towards a longer time-frame trading,but I think his ideas would work for any approach. He comments himself that this book believes in a "common sense" approach to trading.
Short on specifics for the day trader, this book is nonetheless quite valuable in its descriptions Gallagher is, I think, quite the contrarian. Some of my favorite quotes from the book are listed below:
This book has it all. I do not know, or know of, Brent Penfold. But this book is
stellar.
Mr. Penfold clearly defines common mistakes that traders make, traits that successful
traders must have, the importance of money management, methods to develop an
appropriate trading style, the importance of psychology, and very importantly the
unquestionable need to test your ideas before putting them to use with real money (a
definite failure of mine in years past).
This book requires time to read and digest. The lessons alone, are quite similar to what any developing trader has already heard, but this book compiles them into one reference text and stresses the comparative importance. This is an absolute must read. I will however warn you.......you won't like the advice because it is difficult to do what he asks you do (hence, most traders fail).
OK. This book is on everybody's list of great trading books! It is purported to be the story of Jesse Livermore, who was a great Wall St. trader at the turn of the 20th century. Livermore, it is said, made and then lost millions of dollars (again and again) in the early 1900's.
When I first began to trade, I read and read (as many of you are doing now). Soon enough I realized that it was difficult to separate the wheat from the chaff, so I turned to reading recommendations. Again and again I would see "Reminiscences of a Stock Operator", so read it I did. It was alright.......but I could not see why so many people would recommend it, so I began to believe that it was much akin to driving a fancy car, or living in the hamptons. The book selection said much about the person selecting it, whether or not it really helped traders. I read it twice, then put it on my shelf......so it could of course say something about me. I went back to my traditional books and my trading. The book lay on my bookshelf for years, without me touching it again.
One weekend I was free, and had nothing to read. It was too late to order anything, so I went back to my bookshelf. There lay "Reminiscences", so I picked it up. I read it again, only now with the knowledge that only comes with years of wrong trades, losses, poor money management, etc. I thought it was one of the best books I had ever read.
This is, in fact, a great book. But this book was written about a trader who lived in a different time, who dealt with a completely different animal. It is undoubtedly worth the read, but unlikely to make you a great trader
BTW....I have this on mp3 through Audible and it is a great listen too!
These two books are actually written on using market profile charting and strategy to trade. For those of you who are unaware, Market Profile is an idea credited to Peter Steidlmayer, who was a member of the CBOT, and a trader, for more than 40 years. Mr. Steidlmayer apparently developed the idea of Market Profile in the early 80's. He noted that markets tending to trade with bell curve distribution of prices, with most trading at median prices and less activity at extremes. Market Profile charts price action for a given instrument, in relation to 30 minute time These intervals are noted A, B, C......etc.and therefore the profile chart is a sequential series of letters, plotted against price (together called time price opportunities) most often overlapping in several time sequences, with a few outliers.......thus the bell curve. You can learn more in our market profile charting section.
Mr. Steidlmayer has written several books himself including Markets and Market
Logic and Steidlmayer on the markets. An interview with him from several years ago is
posted at the following link:
http://www.elitetrader.com/vb/attachment.php?postid=921848
I included these two books by Jim Dalton, not because I think a trader needs to learn Market Profile, but rather because these books help traders understand the auction process. However, we have more information on market profile in another section.
I have had the pleasure of meeting Mr. Dalton one more than one occasion. I
consider him a friend.
I studied under his tuteldge at seminars, and during a one week intensive session. He
clearly understands the markets quite well, and though I did not immediately excel in
trading after his sessions, I consider his discussions of the "auction process" an
invaluable element in understanding how markets work. His books are well written,
easy to read, and are a valuable resource in trying to understand market
behavior.
These are delightful reads. I have always found them inspiring. Great Traders are
profiled including Michael Marcus, Bruce Kovner, Richard Dennis, Paul Tudor Jones,
and on and on. Do you want to learn a little about Bill O'Neill the founder of
Investors Business Daily? Or perhaps you would rather read about psychology from the
perspective of Dr. Van K. Tharp. Maybe you would rather read about Linda Raschke and
charting or the Ritchie brothers and their work in the "pits" of Chicago. Then there
is always the story of an ohio farm boy who makes it big .....Mark Cook. Each of
these stories has a lesson. After reading them all, you will find some underlying
themes.........like success can happen for anyone...
...but it is not easy and requires diligence and tenacity.
Mr. Cook is described more in a separate section where readers are invited to a Mark Cook Trading Seminar.
I love these books.
I read this book many years ago and to many of you, it may come across as quite simple. It is, however, a good book which delineates technical patterns, ideas and approaches to making profitable trades. Reading this book will be more of a review, but it is worth the time.
This book is 20 years old. The principles however are applicable to current markets too.
I love economics, and I love trying to understand how economic policy can affect market situations. One of the things I like most about this book is that Sperandeo spends much time on Economics and business cycles and helping the trader understand how and why they occur and what they mean.
This book might be especially well suited to the longer term investor, as opposed to day trader, but it is valuable to any and all who will take the time to read it.
Chapter 1 Preservation of Capital / Consistent Profitability (heard these themes before?) Vic Sperandeo again spends much time on Economics and the business cycle, and this is something that most other trading books do not do. It also touches on Macroeconomics, political influence and even foreign exchange.
There is also a chapter on options trading and one entitled "Professional Method of Day Trading"
This book should be read by all developing traders.
As you can see, these books were written three decades ago. They have been updated. "When to sell" is probably the most famous. The wisdom is ageless and they are short, simple texts that will add much to any trader's understanding of markets.
Some classic comments from "When to Sell"
I spoke with Jason Jankovsky via phone one day. I called his office, with the idea of trying to leave a message, and low and behold, he answers his office phone. We spoke for some time and the guy could not have been more pleasant. In the course of our conversation he told me that he was "trader x" from the book "Dances with Lions". That was an unusual book to say the least, but I liked it. Maybe it should have been named "The Tao of Trading" or something to that effect instead, because it is a bit metaphysical. But being an avid reader of quantum physics, I am not sure he was off in his descriptions, just atypical.
This book however, is nothing like Dances with Lions. Jankovsky describes 28 rules that he believes of prime importance to any trader. He explains why on each:
One of Mr. Jankovsky's rules on Understanding the limits of technical analysis is described in more detail in another secion.>
This book, is also worth the read.
Pruden discusses what he thinks are the three essentials of trading:Behavioral Finance to develop a system, Pattern recognition, and mental discipline. He reviews much more than these three concepts but provides a sound description of how to become a consistently profitable trader.
Imagine you take off in a helicopter from Los Angeles. What is the true
compass course the helicopter would fly to go to Reno, Nevada.
Draw a vertical line straight up from Caracas, Venezuela.....What major U.S. city
does this intersect?
If you answered East, and Dallas or New Orleans, then you are like most of
us.......Incorrect.
The true answers are 20 degrees WEST and BOSTON.
Now why is it when you ask a large group of people (well educated), the answers
will be wrong?
These books explore that question and gives some answers. They delve into mental
heuristics, or shortcuts, that we all use, that though meant to help in making quick
decisions, may lead us astray.
ALL traders need to think about how they think. That is one of the great allures of trading. Some want to be successful for the money (which would be great). But to so many more the true allure of trading is in the puzzle. How can it be solved? Why do I fail? Why did I not see that? These books are invaluable in those efforts.
Those who read this book early in their trading careers will likely not even finish it. Disgusted by not finding specifics regarding interpretation of bar charts or how to enter or exit trades, they may not see the relevance.
Those who read this book later in their trading careers will be astounded by its insight, and will recognize it as an important guide to understanding "how we think" and "why we do what we do".
Trading is Thinking. This book is all about how we think and most importantly why we make the decisions we do. If you plan to be successful at trading you will have to learn to analyze how you think. This will include reviewing your decisions and trying to understand why you did what you did. It is mandatory. This book is an introduction into that realm. Each of us would like to think that when confronted with difficult decisions we carefully consider ALL the pros and cons and only then decide on what is best. Our brains simply do not work that way. We all take shortcuts. We must. This may not give you all the guidance you need to overcome that, but at least you will have some awareness that it is happening, and some tips for dealing with it.
Tradernovice.com has a section devoted to intuitive trading.
Priceless! Gary Klein is magnificent in his efforts to help us understand,
appreciate, and nourish our intuitions. This book is, like Sources of Power,
invaluable to anyone who makes decisions; anyone who is confronted with
uncertainty.
Where do our Hunches come from?
Using Analysis to support Intuitions
How to Make tough choices
How to manage uncertainty.
These are just some of the chapters in this classic text. READ THIS BOOK.
Tradernovice.com has a section devoted to intuitive trading.
A great book. This book, as is stated in the introduction, deals with........economics, stock exchange, boardrooms, clinical consultation, ---in fact from wherever decisions are made "under uncertainty"
The above examples of questions regarding Los Angeles and Caracas are examples taken from this book.
Some chapter titles:
Look at the following sequences of the results of tossing a coin seven times. (h=head, t=tails)
Which is more likely to be the true result?
If you said sequence number 2, read this book to find out why that is not true.
This book gives some simple ideas on how to maximize your brain's potential. It is a well done text, easy read, and may help you recognize methods to increase brain power.
This is a short text on understanding randomness. It is a true help in understanding probability theory. Probability theory is an important concept for traders to grasp. It will help you see how unprepared you are to make "off the cuff" assessments of the likelihood of any event occurring. You likely can understand the importance of this ability when it comes to trading.