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MINTED

Baby Steps

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OK....I am about to embark on my trading journey, and like all unknowns, it is scary.

When I was a baby, I crawled first, then took some unsteady steps, then walked unaided, then learnt to talk via the ABC

This is what I am going to do here.....same mentality....LEARN my trading ABC, BUT there are literally hundreds, thousands of books that "claim" to do, just that.

They CAN¨T ALL be right.........so which 5 books, would you experts recommend?

I have seen the post by Thales....but want comparison opinions from others.

Please feel free to mention other learning "tools" too.

 

Many thanks

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Whatever books I might recommend, if any, would depend on where you are and what you want. If you know absolutely nothing about trading or the markets and have absolutely no idea what you want from trading, I would not recommend Reminiscences nor Weinstein nor O'Neil. They are well beyond where you are. If you have some knowledge of and appreciation of how the markets work and what trading involves and what you want from the markets and how you plan to go about getting it, that's a different matter.

 

So......

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Here are the five that had the most impact on the way I trade today:

 

The Richard D. Wyckoff Method of Trading and Investing in Stocks. This is incredibly difficult to find, so if you cannot, read Studies in Tape Reading by Richard Wyckoff, along with the available material in the Wyckoff Forum. (Inexpensive, or free)

Wyckoff lays a strong foundation for an understanding of market action, supply and demand, and support and resistance.

 

My Feeble Attempt to Understand the Market by Dbphoenix. ($30, and is worth quite more)

Dbphoenix, well known here, relays much of his market wisdom and approach. This book is non-linear, and is comprised of sections dealing with different aspects of market analysis.

 

Phantom of the Pits by Art Simpson (Free)

The Phantom, an anonymous successful pit trader, and Art Simpson converse about the Phantom's rules in trading. These rules build the foundation to solid trade management.

 

When to Sell by Justin Mamis (~$20)

Mamis details his method for managing risk and protecting against losses. His texts are slower reads, and full of trading gems. For a most philosophical continuation on risk, pick up The Nature of Risk as well.

 

Zen and the Art of Poker by Larry Phillips (~$6 used)

Phillips focuses on the inner game of Poker, which applies directly to the inner game of trading. Before you can master the markets, you must master yourself. This isn't a book on poker rules or style, but rather about risk management.

 

 

Note that none of these hold any secret keys to the markets. None contain secret setups that can be effortlessly and easily traded. However, the knowledge inside was absolutely invaluable to my own trading success.

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I would recommend the following post by Db: http://www.traderslaboratory.com/forums/f131/couldawouldashoulda-wyckoff-forum-6129.html#post67331 If I were starting out at this game, I'd print that post out, put it in the front of a three ring binder, and make it part of my daily prep.

 

Unlike Db, however, I do not think one needs to put in a certain amount time or study before reading Reminiscences or O'Neil's How to Make Money in Stocks. In my opinion, what one is able to take from either of these books has more to do with his or her intelligence and emotional maturity than one's level of market experience.

 

However, I always recommend that the would-be trader, seduced by visions of sugarplums and wealth dancing about his or her head, first read Nicolas Darvas's How I MAde 2,000,000 in the Stock Market. It is an excellent story that covers Darvas's journey through the stages of development outlined in DB's excellent above referenced post. O'Neil has admitted to various inteviewers that it was Darvas's book that inspired his trading and the formulation of his famous CANSLIM approach. Many "serious" traders found in internet forums ridicule Darvas's book. They would be surprised to learn how many actual traders keep dog-eared and tattered copies of Darvas not in, but on thier desks.

 

Best Wishes,

 

Thales

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They are well beyond where you are.

 

I disagree with that statement.

 

 

Let me explain, I think that even if a reader might not know all terms used in these books, they are the better start. A reader can learn the terms and what they mean with a small additional effort.

 

But, if you read the mainstream food (i.e. xxx for dummies, etc. :helloooo:), you may discover after some years,

that you would have saved plenty of time and money, if you just would have known ... :doh:

 

 

Well, Reminiscences, is the foundation (still IMO) .

 

It shows also the ups and downs in life, as well as the strategies of a trader (i.e. Livermore).

 

Livermore, might not have had the choice of tons of books like we have today. But he was clever, he used common sense, and this book about

him contains so much basic rules (not to say wisdom),

everyone talks about today, not knowing where it comes from.

 

A must read for everyone.

 

Hal

 

 

P.S.: I like Darvas too.

Edited by HAL9000
Guess what? :)

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By posting here, I didn't intend to get into a debate on the pertinence or quality of any given book or books, and while I appreciate the remarks made about my own book and about the thread mentioned by thales, I still don't know anything about "minted" nor about what he knows nor about his level of experience, if any.

 

So, I'll copy here a little of what I've posted in my blog with regard to first steps. Perhaps that will be of benefit to him:

 

In order to succeed at trading, you must have an edge. Your edge begins with the knowledge you gain through your research and testing that a particular price pattern or market behavior offers a level of predictability and a risk to reward ratio that provides a consistently profitable outcome over time. Without it, one is just "playing" the market in order to have something to talk about on message boards. To get it, you have to know exactly what you're looking for and what to do with it once you've found it. This process is what the journal is all about.

 

The journal goes through several stages depending on where you are. Once you've decided where you want to concentrate your efforts (at this level, the journal may resemble a diary), then you begin the process of developing a system (or method, strategy, procedure, whatever you want to call it). Here the journal takes on a different character. Once you've developed a tentative/preliminary system, you begin testing/trading it, and the journal adopts a still different character.

 

The first step is to decide what kind of trader you want to be.

 

* What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.

 

* Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches are selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?

 

 

The second step is to decide what you're going to trade and when you're going to trade it.

 

* Have you found an instrument -- futures, stocks, ETFs, bonds, options -- that provides you with the range and volatility you require but also the safety that enables you to relax and trade in an objective and rational manner?

 

* Have you yet found a time (5m, hourly, weekly) or tick (1t, 200t) or volume (1K, 100K) interval that gives you enough trading opportunities but also gives you enough time to think about what you're doing? If you want to limit your trading to the "morning", are you physically and psychologically prepared to trade all day? If not, can you shrug off whatever opportunities you may miss by limiting the amount of time you spend trading?

 

The third step is to develop your system*.

 

A system consists of (a) a set of rules that you use to select profitable positions and (b) a set of rules that you use to manage the trade once you're in it. (*Note: again, whether you call it a system, a method, a strategy, a plan, a scheme, an approach, a procedure, or a modus operandi is not as important as sitting down and doing it.)

 

And so on. If one cannot answer even the most preliminary questions, then he needs to address those preliminary questions. If he doesn't do it now, he'll have to do it eventually, but by then he will likely have wasted a considerable amount of money.

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I still don't know anything about "minted" nor about what he knows nor about his level of experience, if any.

 

DB,

 

I don't know too,

 

but I hope that you, the OP (and as well beginners) understand my point.

 

I too, would advice them to read your posts and your blog in here at TL.

 

I have ignored the basic things like S/R and trendlines for a long time.

More working on just indicators. So now for me it seems to be the combination of both worlds.

 

No need for a discussion on my side too.

 

Regarding websites, etc.

 

Website: TL is it, some others are mentioned here.

 

Tools: There are tons of it here.

 

So what is it finally?

 

Make your decision, build your plan.

 

Livermore was 14, he saw pictures, he saw his edge,

and then he went real ...

 

He started his journey!

 

 

Hal

 

P.S.: PEACE

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Hi Hal (and others who kindly posted replies)

 

Hal, are you saying that xxxx for Dummies and other such "food", are worth reading OR not?

 

As for the others who asked.........I am a complete trading Virgin. I am lucky enough to have time on my hands, as my good lady wife works. I want to trade short term (one day upwards). I want to make it a full-time "project", with a view to making an income...... (target $50,000 a year, to begin)

 

As far a books etc....it seems in even the small replies so far, most have mentioned the so called "classics", whilst others have mentioned ones, I never heard of. A case of, "ask a 100 people" and get 100 different answers.

 

The book that is difficult to find.....is it the same as "The Day Trader's Bible - Or My Secret In Day Trading Of Stock" ??

 

Again thanks guys / girls......I want the popping of my cherry, to be memorable....not just a quick fumble!!

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I'd stay away from extremely elementary books (For Dummies, etc), but that's just me. I think Dbphoenix's book gives a wonderful intro to markets, personally.

The book that is difficult to find.....is it the same as "The Day Trader's Bible - Or My Secret In Day Trading Of Stock" ??

No, but that's a good place to start. Anything you can find by Wyckoff is good (and we have our very own Wyckoff Forum here devoted to his original stuff).

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Hal, are you saying that xxxx for Dummies and other such "food", are worth reading OR not?

 

 

Hi Minted,

 

My message is the following:

 

I think Reminiscences is a good start.

You understand many things after reading it.

 

It doesn't makes you a good trader just by reading, but you will understand what happens.

It was a long time ago, when it was written, and it is still the same.

 

The xxx for dummies explain the easy things, well, and for a virgin,

they might be right, but from my experience, the xxx for dummies haven't explained me what "shorting" is. I was naive, I was right before in the bull run, but I couldn't see the danger coming from this side.

 

In result, I lost (very) much some years ago, simply because I haven't read my recommendation.

 

In my country shorting wasn't known for "ordinary" people

like me, who read xxx for dummies. I have been naive. Nothing else.

 

Again, my message is read Reminiscences, read the other recs you get here (i.e. from atto, from thales), if you don't understand something in these books, ask here, or use xxx for dummies,

 

but don't trade just based on xxx for dummies.

 

I made my mistakes in the past, and I will make new ones,

but guess what, you will understand, what is said in Reminiscences.

 

 

Hal

Edited by HAL9000
Anyway: :-)

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if you don't understand something in these books, ask here, or use xxx for dummies

 

Barbara Rockefeller's Technical Analysis for Dummies is actually quite good, but then again, she has the experience and the intelligence to pull it off.

 

As for XXX for Dummies, I think that work ought to be discussed in another "type" of forum entirely.

 

Best Wishes,

 

Thales

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I want to make it a full-time "project", with a view to making an income...... (target $50,000 a year, to begin)

 

Target making a profit. You will never make an income from trading. You will either net a profit or net a loss. If you net a profit, by all means, draw some of those profits to meet you a portion or even all of your living expenses. But if you are looking for income, you will likely never even attain marginal profitability.

 

Best Wishes,

 

Thales

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Barbara Rockefeller's Technical Analysis for Dummies is actually quite good

 

Hi Thales,

 

I have have no doubt about it.

And I think we don't need another thread or forum about this.

 

Just to make my use of xxx for dummies a little bit clearer.

 

It is not about the title of a book.

 

 

Its just about all these books like,

 

- I am a big speculator, do it like me.

(Or in other words: buy my books, my last trades have failed!)

 

- How to make your retirement with investments.

(Or like my government likes to say: Your pension is save! IMO: Naive or more than that!)

 

- Sometimes I trade, but more often I sell indicators and more to innocent newbies.

 

...

 

You understand!

 

 

Its not in the words.

 

Its more about, there are tons of books, but aren't just 5 enough?

 

What is message and helpful, and what are just books of traders that never traded?

 

 

Regards,

 

Hal

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Hi Hal (and others who kindly posted replies)

 

Hal, are you saying that xxxx for Dummies and other such "food", are worth reading OR not?

 

As for the others who asked.........I am a complete trading Virgin. I am lucky enough to have time on my hands, as my good lady wife works. I want to trade short term (one day upwards). I want to make it a full-time "project", with a view to making an income...... (target $50,000 a year, to begin)

 

As far a books etc....it seems in even the small replies so far, most have mentioned the so called "classics", whilst others have mentioned ones, I never heard of. A case of, "ask a 100 people" and get 100 different answers.

 

The book that is difficult to find.....is it the same as "The Day Trader's Bible - Or My Secret In Day Trading Of Stock" ??

 

Again thanks guys / girls......I want the popping of my cherry, to be memorable....not just a quick fumble!!

 

Appears that you want to learn how to trade quickly and to earn quickly also - so here's my suggestion. Read those books/items the OP recommended to get some understanding of the market. But don't have that limiting mentality of 5 books a few websites etc. In the future, explore whatever trading books (library books are free)/websites out there. After a month or 2 of reading/exploring go and explore trading. Since one can't learn to ride a bike or fish by reading a book, same with trading. So open some practice accounts - go and trade, invest paper account. forex, options ,futures, eminis- short term, daytrading, swing trade. Go join some trial trading rooms theres alot out there(usually a month for free). You find out the time commentment and work required real time. YOu find out where you're lacking and what you need to learn. Maybe you like it , hate it , or love it, or its not for you since it is a life style. YOu get to choose. You personally will find out how it might be and what kind of trader you prefer to be. Boils down to - "Must do the work!" After you find out what kind of trader you like to be , then the next step is learn how to be that successful trader - by defintion , a profitable trader. By this time you certanly will know which books will be pertinent for you.

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I am a complete trading Virgin. I am lucky enough to have time on my hands, as my good lady wife works. I want to trade short term (one day upwards). I want to make it a full-time "project", with a view to making an income...... (target $50,000 a year, to begin)

 

How "complete" a trading virgin are you?

 

Do you know what a stock is, what it represents?

 

If so, do you know how the price of a stock is determined?

 

If so, do you know why the price of a stock goes up and down?

 

If so, do you know why stocks suddenly reverse and take off in the opposite direction?

 

Do you know what a broker is? If so, do you know why he is necessary? Do you know what commissions are?

 

Do you know what "slippage" is?

 

If you don't know or are uncertain of the answers to any of these questions, I suggest you postpone the sophisticated and philosophical stuff for later.

 

At the bottom of the page I linked to in my last post, there are two books which I recommend to "complete virgins": The Wall Street Journal Complete Money and Investing Guidebook and/or Standard and Poor's Guide to Money and Investing. If and when you understand what's in these books, you'll be in a position to move from A to B.

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Minted,

 

while you are cooking ;)

 

Here is one more from me, that I have read some days ago,

 

its not a novel like Reminiscences,

 

its much more like the testament of J. L. Livermore by himself.

 

He writes about what he has learned during his life.

 

He shows his system and I think that he describes the sequences of

HL, HH, HL, HH, LL, LH, LL in his system. Very basic.

 

So I am not praying his wisdom here, but ... maybe you decide to start

to read his things.

 

This book is called "How to trade in stocks; The Livermore Formula for Combing Time Element and Price" by Jesse L. Livermore.

 

Well, and to give you an impression here is a thought about

investors and speculators from the 1940 edition, or so.

 

I know, I am overshooting once more, but I like it.

 

Forgive me.

 

Please? :rofl:

 

:roll eyes:

 

 

attachment.php?attachmentid=12109&stc=1&d=1247356464

How_to_trade_in_stocks.png.3abc3578ecaa1f7c8f101a1c86703214.png

Edited by HAL9000
There is always something. ;-)

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