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Nvesta81

If You Could Only Recommend 1 Trading Book?

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as the title says, if you could only recommend 1 trading book, which would it be?

 

I've only read about 3 so far and to be honest I haven't found much value in them. Most of what I've learned I had to learn the hard way, from trial and error and just plain screen time. I'm looking to expand my knowledge as much as I can so I'd like to buy a new trading book. I'm hoping some of you more experienced traders can lend me a hand and point me in the right direction. Thanks. :cool:

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nvest - knowing what I know now (and understand), I would pick this one book that I reviewed on TL: http://www.traderslaboratory.com/forums/f8/japanese-candlestick-charting-techniques-second-edition-1561.html

 

Which is for: Japanese Candlestick Charting Techniques, Second Edition by Steve Nison

 

Now, there is one caveat to why I would recommend this one... I now 'get' what candlesticks do... I understand what the candles are 'saying'. It's much more than hunting for shapes, which is what many noobs do and then claim that candles do not work...

 

So that's the book that I would have by my side if only one.

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It's difficult to pick just one considering that there has never been a comprehensive enough book ever published.

 

But to take a stab I would say...

 

Mind Over Markets

 

I say MoM because it teaches one critical element of successful trading and that is latteral thought.

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I think it depends on where you are as a trader (beginner, advanced or vet). Giving someone a book that's too complex hope help unless he goes through basics first.

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This is a very intelligent post by Brownsfan. Most specifically these few words.

I now 'get' what candlesticks do... I understand what the candles are 'saying'. It's much more than hunting for shapes, which is what many noobs do and then claim that candles do not work...

If someone would take the time to really think about that statement they may reap great rewards. That is the real key to the method part of your trading plan. There are three parts to trading mind,money,and method. That statement deals exclusively with method and to be successful one must master all three not just one.

Now dealing with the actual statement. I now 'get' what candlesticks do... I understand what the candles are 'saying'. It's much more than hunting for shapes, which is what many noobs do and then claim that candles do not work... Steve Nisons book is a great place to start and learn about the candles. However, I think that he doesn't elaborate to much on how to really trade the candles. This is no real fault of his because its next to impossible to really explain it. Its similar to having a child learn to ride a bike by reading a book. It simply wont help. The child must internalise how to ride a bike from genuine practise not stimulation of his brain from book knowledge. Nisons only real suggestion is trade the candles when a confluence of things are lining up at the same time and always trade in the direction of the major trend. I personally think this is a real good idea for active investing but not trading. These type of occurrences are rather rare, it doesn't provide enough frequency to trade like a professional. A professional knows that any trade can very easily fail therefore his job is altogether different than what most traders think it really is. His real job is to intelligently increase his sample size so that his confirmed edge has ample opportunity to play its self out and deliver its statistically reliable results.In my mind trading is not a game, or a skill, or a competition, or any other thing that most traders like to call it and get their ego involved. Trading is simply having an edge and letting the edge work by itself for you. Most people really believe that over trading is bad or wrong. This is of course true if you are incompetent. On the other hand if you are qualified over trading is your best friend because it allows you to increase your sample size. Enough rambling here is my suggested reading and it cant be done in only one book. However, it could be done in only five.

Mind- 1. Trading in the Zone Mark Douglas 2. Reminisces of a Stock Operator Edwin Lefreve

Method- 3. Japanese Candlestick Charting Techniques Steve Nison 4. John Murphy's book on technical analysis (I cant think of the correct name off the top of my head)

Money- Trade your way to financial freedom Van Tharp

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Wasn't there a thread along these lines quite recently? The answer for me and many others for that matter is "Reminiscences of a Stock Operator" it's a 1923 book written by Edwin Lefèvre which tells a fictionalized version of the early years of the life story of Jesse Livermore. Every sentence is chock full of wisdom on many different levels. Read market wizards and see how many great traders cite it as the most influential book about trading ever written. Read it a dozen times at least. The style of writing ensures that it is entertaining on every read also.

 

Currently reading "Trading Exchanges & Market Microstructure for Practioners." Absolutely splendid book, I intend to add it to the reviews section but it is taking me a long long time to finish. This one is full of facts and information about who trades and why it details there effects on the markets they operate in and why they slect them. Actually there is probably as much raw information in this book as any I have read on any subject. Despite that it is quite accessible and easy to read. I have a feeling that when fully digested this will become quite 'profound'. Its certainly one I would urge people to read if they want to further there understanding of markets traders and trading.

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If this really is about "trading" as opposed to "investing", I would say Trading in the Zone...Mark Douglas. Get your head on straight from the start. Next would be the Bible.

 

I 2nd this book. Even somewhat for investing the psych game is big on when to take profits etc...

 

:cool:

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I think it depends on where you are as a trader (beginner, advanced or vet). Giving someone a book that's too complex hope help unless he goes through basics first.

 

I'd say I'm intermediate at this point. I realize that it's hard to sum up all of trading in 1 book, and I know there are several good ones, but the reason I want just 1 recommendation per person is that it'll be easier for me to choose which book I want to buy for now. I also knew that not everyone would agree on the same book so at the very least we'll get a good list going.

 

I've decided to order 3 in total for now:

 

Japanese Candlestick Charting Techniques

Mind Over Markets

Trading in the Zone

 

That should hold me over for awhile. I found a free PDF of Reminiscences of a Stock Operator. I got a lot of reading to do. :). Keep em coming.

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I would recommend checking out your local library and seeing what they have. When I first got into this I would check out 10 books at a time and quickly go through them and read what seemed important. You might be surprised at how good the finance section is at a big library, saves alot of cash. As mentioned you can also find virtually every trading book as pdf on p2p networks. Its nice to browse before you buy.

While some books are alot better than others I don't think I've ever read a trading book that was literally useless. I would go for quantity over quality until you find your personal style.

"Statistics Without Tears" is also also an amazing book if you never took stats in school and certainly helpful to know.

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Most people really believe that over trading is bad or wrong. This is of course true if you are incompetent. On the other hand if you are qualified over trading is your best friend because it allows you to increase your sample size
Even if it increases your sampling size, overtrading is wrong for most beginners because there is no edge and commission and slippage adds up easily. It also reinforce bad habits if you don't have an edge and it tires you out before you can find a better set up - often you will get into a bad trade and become reluctant to enter the next trade which could be a much better setup. LBR (Raschke) has mentioned how most professionals will trade less with less size and break even on a lot of choppy days but make it up on large, usually trending days where their setups are optimal. LBR doesn't need any plugs, but there are many free articles on her site as well. Edited by thrunner
add url to free articles

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Even if it increases your sampling size, overtrading is wrong for most beginners because there is no edge and commission and slippage adds up easily. It also reinforce bad habits if you don't have an edge and it tires you out before you can find a better set up - often you will get into a bad trade and become reluctant to enter the next trade which could be a much better setup. LBR (Raschke) has mentioned how most professionals will trade less with less size and break even on a lot of choppy days but make it up on large, usually trending days where their setups are optimal. LBR doesn't need any plugs, but there are many free articles on her site as well.

 

Agreed and I know this first hand. Sample size with no edge is a pointless sample set. And the fees will ruin the odds as you stated.

 

Almost all my losses on my 70 stock and 54 future trades were commish.

$1100 in commish, down $1300 lifetime. I now have a new perspective on fees and how it impacts the bottom line bigtime. ;)

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If you have no edge it can be show statistically that your best option to win is to go all in on one trade rather than lots of small trades which will surely empty your account. Whether that is considered over trading or not I dunno.

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I think it depends on where you are as a trader (beginner, advanced or vet). Giving someone a book that's too complex hope help unless he goes through basics first.

 

Good answer Torero. My number one recommendation would be Mind Over Markets. I owe everything to market profile so will be biased :)

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If you have no edge it can be show statistically that your best option to win is to go all in on one trade rather than lots of small trades which will surely empty your account. Whether that is considered over trading or not I dunno.

 

Poor money management more than overtrading.

Over extending might be a proper word for that...or just gambling even. ;)

 

Good point though. :)

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Poor money management more than overtrading.

Over extending might be a proper word for that...or just gambling even. ;)

 

Good point though. :)

 

I've noticed that even on days where I get carried away and over-trade I never lose that much money because I use proper money management and reasonable stops. Even if you were only getting 50% accuracy you can still manage to not lose too much or even be ahead depending on the size of your winners. People that really lose big must be reckless. :confused:

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I've noticed that even on days where I get carried away and over-trade I never lose that much money because I use proper money management and reasonable stops. Even if you were only getting 50% accuracy you can still manage to not lose too much or even be ahead depending on the size of your winners. People that really lose big must be reckless. :confused:

 

Most people I've seen take BIG losses were overextended for their equity level. Swinging for the fences will get you knocked out at one point or another. It's a combo too of not knowing when to cut a loser and freezing up though. Double whammy.

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The most valuable trading books I have read are:

 

Undeclared Secrets of the Stock Market - Tom Williams

The Wyckoff Course in Stock Market Science & Technique - Richard Wyckoff

Reminisensces of a Stock Operator - Edwin Lefever

Trading in the Zone - Mark Douglas

 

Eiger

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The value of a book alters as your skill level changes. My current No. 1 is

The Definitive Guide to Point and Figure by Jeremy du Plessis.

 

I have also found

 

Bollinger on Bollinger Bands by John Bollinger.

and

Trading Without Fear by Richard Arms

 

good books.

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One book isn't enough, though I would encourage you to read the following;

 

Reminiscences of a Stock Operator - Edwin Lefevre

Studies in Tape Reading - Richard Wyckoff

Enhancing Trader Performance - Breet Steenbarger

Trading in the Zone - Mark Douglas

 

You should be aware however that if all you do is read books about trading rather than actually trade, you'll become little more than a knowledgeable amateur. I refer you to an entry in DbPhoenix's blog regards the practice of becoming a trader;

 

http://www.traderslaboratory.com/forums/blog.php?b=36

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-"Way of the Turtle" by Curtis Faith. (It's not about the turtles or trend following what make this book so good. It's the psychology, discussion on robust trading systems and thinking on profitable trading)

 

If you need more:

 

- "Trade Your Way to Financial Freedom" by Van K. Tharp (I hate the title of the book though)

- "Evidence-Based Technical Analysis" by David Aronson (cuts through all the bullshit in trading)

 

For fun and education:

 

-"Reminiscenes of a Stock Operator"

- "Market Wizards" Books

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I think volume-price spread, technique is the Key

so I suggest

1. Undeclared Secrets of the Stock Market - Tom Williams

2.The Wyckoff Course in Stock Market Science & Technique - Richard Wyckoff

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-"Way of the Turtle" by Curtis Faith. (It's not about the turtles or trend following what make this book so good. It's the psychology, discussion on robust trading systems and thinking on profitable trading)

 

This is the worst book on trading ever. Of course, I think Faith and his outside view of being a turtle (since never being one) just shows how arbitrary trading ideas can be.

 

;)

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