# Best trading book



## YOUNG_TRADER (15 May 2007)

Hi guys,

Could the trading Guru's recommend what trading books in the ASF shop are really good?

A little bit of analysis would be good (if possible)

I like the look of the books on psychology etc


Thanks in advance guys


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## Cyber Man (15 May 2007)

I have read hundreds of books and these are my top 4. They are not for everyone but they are great books and very helpful to me. -

45 Years in Wall Street – Gann

How to Make Profits in Commodities – Gann

Reminiscences of a Stock Operator - Edwin Lefevre

New Market Wizards: Conversations with America's Top Traders - Jack Schwager


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## nizar (15 May 2007)

Im no guru but i heard Douglas' Trading in the Zone was a good one.
Havent read it myself yet.
Currently im reading Edwin Leferve.


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## rowes (15 May 2007)

Hi,

I'm currently reading Mark Douglas's Trading in the zone at the moment, just about finished. It has definitly opened up a whole new perspective to trading that i had not given any thought to. I think its a fantastic read, and i honestly think that it will improve my future trading 10 fold.


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## rowes (5 June 2007)

Hi again,

Just wanted to add that.... Far out i am strugglin towards the end of this book, first half couldnt put it down, second half cant pick it up. I am determined to finish it though.

I dont quite hold the same view as i did in my previous post so thought i had better say so.


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## Sprinter79 (5 June 2007)

He craps on a bit huh. He could have got his message across in about half the pages...


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## Gar (5 June 2007)

nizar said:


> Im no guru but i heard Douglas' Trading in the Zone was a good one.
> Havent read it myself yet.




Damned good book!, but I think its best suited for people that have been trading for a little while and have experienced some of the emotions and made some of the mistakes mentioned in its pages.

Sprinter, Rowes: he does repeat himself a helluva lot but I think it really drums it into you, which is a good thing

Im currently working my way through Stan Weinsteins - secrets for profiting in bull and bear markets at the moment, its a little basic but im still pulling some great commonsense tips out of it.

with that said its probably _the_ best beginner book ive read

Nick Radge's book really blew me away, the first chapters in this book set the basis for my trading plan and my risk management plan.  I dont use elliot wave for trading so I cant really comment on that side of the book


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## Sprinter79 (5 June 2007)

Gar said:


> Nick Radge's book really blew me away, the first chapters in this book set the basis for my trading plan and my risk management plan.  I dont use elliot wave for trading so I cant really comment on that side of the book





Is that the 'Adaptive Analysis....' one?


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## CanOz (5 June 2007)

Sprinter79 said:


> Is that the 'Adaptive Analysis....' one?




Another of Nick's books, "Everyday Traders" is good too. When i first read it i didn't find it particularly useful, although certainly entertaining. However after doing the trading course, the futures course, as well as what i've learned about mechanical systems so far...i've gone back and read it again, and this time i've managed to pick out numerous valuable lessons from the book. 

This would definatly interest some of the more experienced traders here...heck some of them might even be in the book!

Cheers,


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## Gar (5 June 2007)

Sprinter79 said:


> Is that the 'Adaptive Analysis....' one?




Thats the one


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## Chorlton (5 June 2007)

CanOz said:


> Another of Nick's books, "Everyday Traders" is good too. When i first read it i didn't find it particularly useful, although certainly entertaining. However after doing the trading course, the futures course, as well as what i've learned about mechanical systems so far...i've gone back and read it again, and this time i've managed to pick out numerous valuable lessons from the book.
> 
> This would definatly interest some of the more experienced traders here...heck some of them might even be in the book!
> 
> Cheers,




Hi Canaussieuck,

Can I ask what Trading Course you are referring to???

Thanks,

Chorlton


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## CanOz (5 June 2007)

Chorlton said:


> Hi Canaussieuck,
> 
> Can I ask what Trading Course you are referring to???
> 
> ...




Its called: "Building a Profitable Trading Plan Using Technical Analysis"

And the futures course is: "The Futures Market - Lessons From An Insider" 

You can find more info here.

http://www.reefcap.com/reef_capital_courses.htm

Cheers,


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## Chorlton (5 June 2007)

Ah..... A Nick Radge course then.....  

I might take a look at it then, as I like his approach with regard to his teaching approach.....

Thanks.....


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## CanOz (5 June 2007)

Chorlton said:


> Ah..... A Nick Radge course then.....
> 
> I might take a look at it then, as I like his approach with regard to his teaching approach.....
> 
> Thanks.....




Oh I forgot to mention the three months worth of email mentoring that comes with it too....to be honest I haven't used this yet, although I'm putting together a list of things to discuss with him.


Cheers,


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## Sprinter79 (5 June 2007)

Sprinter79 said:


> Is that the 'Adaptive Analysis....' one?







Gar said:


> Thats the one




Sweet, my brother's reading that one at the moment


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## bowser (5 June 2007)

Beyond technical analysis - Tushar Chande

It's one book that I havn't seen mentioned very often. I gained a lot of knowledge from it.

Great book for developing a mechanical plan, or improving one. Fairly heavy on statistical analysis so if that isn't your cup of tea...


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## Lachlan6 (5 June 2007)

Van Tharpe's 'Trade your way to financial freedom' is good from a systems and psychology point of view.


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## Magdoran (5 June 2007)

rowes said:


> Hi again,
> 
> Just wanted to add that.... Far out i am strugglin towards the end of this book, first half couldnt put it down, second half cant pick it up. I am determined to finish it though.
> 
> I dont quite hold the same view as i did in my previous post so thought i had better say so.



*Mark Douglas "Trading in the Zone"*


The book is designed to establish the right mindset for traders, and has to do this for a range of people - hence the latter segments may not appear as riveting as the first half, but the positive effects are often subtle, and it is vital to read the book cover to cover to get the full psychological benefit in sequence.

Then try re-reading it once you’ve read it cover to cover.  It’s only later when you see the effect on your trading that you will really be able to get a feel for the full effect on your psychology.

Douglas I believe was very clever in how he constructed “Trading in the Zone”, and while it’s not the same as seeing him personally and having a tailored psychological session, as far as books go, it’s very effective across a range of different trading mindsets, and I suspect ultimately addresses most people's core needs.

Try to persevere; the ending is important as it brings together a range of aspects vital to establishing a “probabilistic mindset”.

I still have the "Five Fundamental Truths" and the “consistent winner” axioms stuck to my computer screens (and have had these for a few years now), and you wouldn’t believe how often I’ve looked down at them and applied the wisdom (especially “I pay myself as the market makes money available to me”).


Hope this helps.


Regards,


Magdoran


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## Chorlton (5 June 2007)

CanOz said:


> Oh I forgot to mention the three months worth of email mentoring that comes with it too....to be honest I haven't used this yet, although I'm putting together a list of things to discuss with him.
> 
> 
> Cheers,




Thanks Canaussieuck........


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## surfingman (5 June 2007)

Can anyone recommend a book on Technical Analysis? I am thinking of buying Chart Your Way to Profits: The Online Trader's Guide to Technical Analysis by Tim Knight


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## rowes (6 June 2007)

Magdoran said:


> *Mark Douglas "Trading in the Zone"*
> 
> 
> The book is designed to establish the right mindset for traders, and has to do this for a range of people - hence the latter segments may not appear as riveting as the first half, but the positive effects are often subtle, and it is vital to read the book cover to cover to get the full psychological benefit in sequence.
> ...




It is a book i feel i have currently gained alot from (so far), and it is also a book that as i have read it it triggers little things in my head that make me think hang on and i go back a paragraph or to and reread. i will finish the book and yes i think that in the future i will reread it and i do think that i will gain more the next time round and probably pick up on alot of things that i have missed. the Tech books i have read i love and can easily switch of my surroundings and take it all in, some mornings i take the oppurtunity and put in some reading while my boys are watching the wiggles in the background lol, but i need a complete different enviroment to take in the messages and lessons to be learnt in a book such as trading in the zone... maybe thats half the problem.


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## Gar (6 June 2007)

surfingman said:


> Can anyone recommend a book on Technical Analysis? I am thinking of buying Chart Your Way to Profits: The Online Trader's Guide to Technical Analysis by Tim Knight




I found louise bedfords book charting secrets to be pretty damn good.

make sure you have a run through this too http://www.incrediblecharts.com/technical/easy_guide.htm
if you havent already


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## josh_in_a_box (13 June 2007)

The Essays of Warren Buffett
Lessons for Investors and Mangers

Lawrence A. Cunningham

ISBN-10 0-470-82078-0
ISBN-13 978-0-470-82078-0


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## Temjin (13 June 2007)

Curtis Faith's latest book, "Way of the Turtle"

I agree with Dr Tharp on this comment on this book, this was to be ONE OF THE TOP 5 GREATEST TRADING BOOK OF ALL TIME!

It "almost" completely summarises what I believed (and that other experts believed like Van Tharp) in what it takes to trade successfully in the past 12 months+.


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## nizar (13 June 2007)

Temjin said:


> Curtis Faith's latest book, "Way of the Turtle"
> 
> I agree with Dr Tharp on this comment on this book, this was to be ONE OF THE TOP 5 GREATEST TRADING BOOK OF ALL TIME!
> 
> It "almost" completely summarises what I believed (and that other experts believed like Van Tharp) in what it takes to trade successfully in the past 12 months+.




Temjin.
Thanks for that.

Have a look at Curtis Faith's interview on youTube, he admits that hes lost all his money?? Weird -- i dunno if it was from his trading or something else.

And from what I read it seems to be conflicting if Jerry Parker or Curtis Faith was the most successful turtle?

Jerry Parker manages more than $1billion.

The best trading book I have read, by far, has to be:
*Michael Covel - Trend Following*

Highly Recommended.


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## wayneL (13 June 2007)

nizar said:


> Temjin.
> Thanks for that.
> 
> Have a look at Curtis Faith's interview on youTube, he admits that hes lost all his money?? Weird -- i dunno if it was from his trading or something else.
> ...



Curtis lost all his money on a business venture, not trading.


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## Joules MM1 (16 June 2007)

Richard D Wyckoff The Day Traders Bible

a must for newbies........a good introductory

a book about thinking through the process of trade..........a book that invites the trader to encompass all the facets of the trading arena, that is, all the players involved.........assists the trader to reason each transaction as the evidence presents, rather than simply make a formulaic approach............afterall, price movement is a dynamic activity in the present, not the past.........one cannot trade a historical chart, one can only ever trade  the present price..........

J


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## explod (16 June 2007)

nizar said:


> Temjin.
> Thanks for that.
> 
> Have a look at Curtis Faith's interview on youTube, he admits that hes lost all his money?? Weird -- i dunno if it was from his trading or something else.
> ...





Could not agree more, picked this text up over 12 months ago and the changes to my trading apporoach and philosophy has had a profound effect on my profits.    This book helps you see the big picture and makes you realise that you do not need sophisticated systems.   An eye opener.


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## tech/a (16 June 2007)

> that you do not need sophisticated systems.




Now where is a book that encapsulates *this!*

Just one step further on is that you *DO NEED *a system/method that can be proven to be positive in expectancy and measurable in performance.


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## CanOz (16 June 2007)

tech/a said:


> Now where is a book that encapsulates *this!*
> 
> Just one step further on is that you *DO NEED *a system/method that can be proven to be positive in expectancy and measurable in performance.




Quantitative Trading Systems - Howard B Bandy

http://www.quantitativetradingsystems.com

I think this book is right up your ally, he is totally focused on testing.

Cheers,


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## Kauri (16 June 2007)

Don Scotts book "Winning"... not that it has anything to do with shares but rather with horse racing. It was the first time I realised that with logic, research, dedication, passion, discipline, a plan/method, ensuring that the odds and expectancy were in your favour, and all those other oft trotted out cliches, you could actually beat something seemingly as random and corrupt as the races... then reading Nicks "*Adaptive Analysis*" over 20 years later the penny finally dropped... happily the pennies continue to drop daily....
   Currently reading "Alice in Wonderland".... think there may just be a parallell between that and some of the market participation currently   .


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## tech/a (16 June 2007)

*CAN*
Yes Ive seen that mentioned a few times.
Had a look at it and see while its Amibroker based it does give you a progressive re enforcement as to whats required in the testing process.
David Samborsky's Tradesim MANUAL is really excellent and along these lines---of course you need to purchase Tradesim.
This will do me and has done me well.

*Kauri*
Radges Adaptive Analysis also hits the nail on the head re "Being Right".
Following his thinking and methodologies in "The Chartist" is also a great way to get in sync (I think). I dont need Nick's analysis but I do need his "thinking" its in sync with what I have found the hard way.An excellent mentor without needing to have him sit next to me!
With the implementation of some new and excellent training features within "The Chartist" Nick just seems to be rising to the top and growing as an educator.

I can and have adapted it to my own trading methods and of course thinking.


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## CanOz (16 June 2007)

tech/a said:


> *CAN*
> Yes Ive seen that mentioned a few times.
> Had a look at it and see while its Amibroker based it does give you a progressive re enforcement as to whats required in the testing process.
> David Samborsky's Tradesim MANUAL is really excellent and along these lines---of course you need to purchase Tradesim.
> ...




I think it was Bandy's intention in a way to do what you say has been done for TradeSim. He wanted a manual that you could use both to learn AB and apply it to systems development. He is now writing a users manual for Amibroker that is less 'raw' than the Amibroker manuals.

On Adaptive Analysis, he takes it further in his course "Using technical analysis to develop profitable trading plans"....its like the long version of the first 50 odd pages of the book. A bargain at $500, i made that back already...and its still going!

Cheers,


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## explod (16 June 2007)

explod said:


> Could not agree more, picked this text up over 12 months ago and the changes to my trading apporoach and philosophy has had a profound effect on my profits.    This book helps you see the big picture and makes you realise that you do not need sophisticated systems.   An eye opener.




The operative word "...sophisticated..." perhaps should have said "complicated".  Good book anyway


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## It's Snake Pliskin (16 June 2007)

Kauri said:


> Don Scotts book "Winning"... not that it has anything to do with shares but rather with horse racing. It was the first time I realised that with logic, research, dedication, passion, discipline, a plan/method, ensuring that the odds and expectancy were in your favour, and all those other oft trotted out cliches, you could actually beat something seemingly as random and corrupt as the races... then reading Nicks "*Adaptive Analysis*" over 20 years later the penny finally dropped... happily the pennies continue to drop daily....
> Currently reading "Alice in Wonderland".... think there may just be a parallell between that and some of the market participation currently   .





Let us know how Alice turns out Kauri. Too funny I must admit


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## >Apocalypto< (18 June 2007)

Temjin said:


> Curtis Faith's latest book, "Way of the Turtle"
> 
> I agree with Dr Tharp on this comment on this book, this was to be ONE OF THE TOP 5 GREATEST TRADING BOOK OF ALL TIME!
> 
> It "almost" completely summarises what I believed (and that other experts believed like Van Tharp) in what it takes to trade successfully in the past 12 months+.




I would not put your all into Van Tharp Temjin, he failed at the one thing he claims to be in expert in teaching! Maybe that's the egde you need to be a great teacher.

Great books on Real Traders and how they made it from bottom to top is Market Wizards and New market Wizards. ( yes i know van tharp has a section in there.)


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## >Apocalypto< (18 June 2007)

nizar said:


> Temjin.
> Thanks for that.
> 
> Have a look at Curtis Faith's interview on youTube, he admits that hes lost all his money?? Weird -- i dunno if it was from his trading or something else.
> ...





That explains why he came out with the book way of the turtle, Capital raising! ha ha ha just a harmless dig Turtle followers!


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## Temjin (18 June 2007)

Trade_It said:


> I would not put your all into Van Tharp Temjin, he failed at the one thing he claims to be in expert in teaching! Maybe that's the egde you need to be a great teacher.
> 
> Great books on Real Traders and how they made it from bottom to top is Market Wizards and New market Wizards. ( yes i know van tharp has a section in there.)




Where did I even mention I am putting "all" into Van Tharp?? 

I've read ALL the market wizards series books, as long as some of the other popular and highly recommended trading/investment books mentioned in this forum and from other sources. 

My belief is still Van Tharp's work summarise the FOUNDATION of what it takes to be succeed in trading. There are tons of other books out there which elaborate more on the details, such as system design, testing, optimisation, evaluations and down to simple technical indicators. 

Essentially, it's your belief on what it takes to succeed and I wouldn't blame anyone else if I fail on the road to it, just need to learn from the mistakes. 



			
				Trade_IT said:
			
		

> That explains why he came out with the book way of the turtle, Capital raising! ha ha ha just a harmless dig Turtle followers!




I recommend you read his book in whole before making that comment, and also read WayneL's reply in a few posts up.

He lost his money due to a business venture, not on trading. He had never intended to become super rich through trading because he has his own perspective of being successful. In addition, he does not give a s--t about anybody else who judge "success" differently. 

That, in my opinion, demonstrate extreme high self-esteem and the make up of a very successful trader.


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## >Apocalypto< (18 June 2007)

Temjin said:


> Where did I even mention I am putting "all" into Van Tharp??
> 
> I've read ALL the market wizards series books, as long as some of the other popular and highly recommended trading/investment books mentioned in this forum and from other sources.
> 
> ...




Don't get your panties in a knot, did you miss the part of it was a joke.

Are you trading yet Temjin?

Seems like you know a lot about what it takes to be a good trader, you must be going well.


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## Temjin (18 June 2007)

Trade_It said:


> Don't get your panties in a knot, did you miss the part of it was a joke.
> 
> Are you trading yet Temjin?
> 
> Seems like you know a lot about what it takes to be a good trader, you must be going well.




Hehe sorry then, I probably didn't get it. 

And no, at least not fully live yet. I have been treating it as almost like a diploma course for the past few months, Just about read every recommended books I could get my hands. Had to make sure I have a good understanding of what it takes to succeed. 

It's quite enlightening to know that once you opened up yourself to many ideas out there, you can differentiate the "better" ideas that are more "followed" by the more popular and successful traders out there. Does help alot with trading confidence in one way or another.

I'm still in the process of designing the system. It's a lot more complex than I previously thought as it involves ALOT of programming. At the minimum, I wanted a semi-automatic mechanical ADAPTIVE trading system that integrates everything from entry, exit, position sizings and overall portfolio management.

The biggest advantage would I do not have to worry about the psychological downside of executing the trades (because everything are automated) and only have to focus my effort on building and evaluating my system. The only thing I had to deal with is the psychology involved in actually having the confidence to use the system, which is something I have not fully tested myself yet. 

Still a fairly long road ahead.


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## >Apocalypto< (19 June 2007)

Temjin said:


> Hehe sorry then, I probably didn't get it.
> 
> And no, at least not fully live yet. I have been treating it as almost like a diploma course for the past few months, Just about read every recommended books I could get my hands. Had to make sure I have a good understanding of what it takes to succeed.
> 
> ...




I know nothing about system trading nor do I ever want to travel down that road.

I respect it, one member you could  try to talk too is Tech/A a very successful system creator. If that's your path. (sure you know that already)

I do have the utmost respect for a man named Edd Seykota. who I am sure you know alot about if thats your thing.

I am not sure you will completely miss the emotional challenges that every trader has to deal with at least once in there trading journey. 

I know until recently there were meny personal emotional battles I had to overcome. I have read Van tharp and about 40 other books off the top of my head, maybe more, since OCT05 when i made my first ever trade.

None of those books nor anything could have prepared me for the real thing. it is something that takes time to get a master on.

Only advice I can suggest to you is trade small in your beginning and never take defeat as failure, as it's very easy to do. forget the demons and keep working out were u went wrong and build on it. 

Good trading Temjin


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## Trembling Hand (19 June 2007)

Temjin said:


> Hehe sorry then, I probably didn't get it.
> 
> And no, at least not fully live yet. I have been treating it as almost like a diploma course for the past few months, Just about read every recommended books I could get my hands. Had to make sure I have a good understanding of what it takes to succeed.
> 
> ...




Like to see no "psychological downside of executing the trades " as your system approaches your maximum draw down and then you have to figure out whether to change your system or let it run. I don't think there would be any different psychology to dealing with the stress of an automated system or a discretionary one.

Back on topic the book I enjoyed reading most was Reminiscences of a stock operator.
And the book that helped me with trading the most has been "Enhancing trader performance" by Dr Steenbarger. Great book on finding YOUR strategy and implementing it with stacks of insight from a professional trading coach.


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## >Apocalypto< (19 June 2007)

trembling Hand said:


> Like to see no "psychological downside of executing the trades " as your system approaches your maximum draw down and then you have to figure out whether to change your system or let it run. I don't think there would be any different psychology to dealing with the stress of an automated system or a discretionary one.
> 
> Back on topic the book I enjoyed reading most was Reminiscences of a stock operator.
> And the book that helped me with trading the most has been "Enhancing trader performance" by Dr Steenbarger. Great book on finding YOUR strategy and implementing it with stacks of insight from a professional trading coach.




TH,

If you have a taste for Livermore I strongly recommend you grab this, his own book: *How to trade in stocks* 1940 original the book speaks for it's self.

here is the link.

http://stockvision.org/books/Jesse_Livermore-How_To_Trade_In_Stocks_(1940_original)-EN.pdf

if that does not work just Wiki his name and its down the bottom of the page with all the other books on in PDF file.


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## Trembling Hand (19 June 2007)

Trade_It
Thanks thats great.


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## Temjin (20 June 2007)

Trade_It said:


> I know nothing about system trading nor do I ever want to travel down that road.
> 
> I respect it, one member you could try to talk too is Tech/A a very successful system creator. If that's your path. (sure you know that already)
> 
> ...




Thanks, I do have a fairly comprehensive written trading plan right now but didn't realise the learning curve in programming is far steeper than initially anticipated. 

When I meant is that the automatic mechnical trading system will eliminate the psychological downside of execution of trades ONLY. That is, the program will follow my adaptive system consistently with no questions asked. 

That's why I said previously I have to focus on the psychology in dealing with actually maintaining the system and evaluating it continously. I need to prepare myself when the system does (and WILL) go in a severe drawdown. There are still many psychological issues I need to handle but at the very minimum, the actual execution of trades (entering and exiting) are handled automatically. No more, "ohhh wait, maybe I should wait for the trade to move back up again before exiting, etc, etc". That's the advantage of using a fully automated (server or broker assisted) trading system. 

Back to the original topic of books, I would highly recommend anyone else to take the Peak Performance course developed by Dr Van Tharp. I found it EXTREMELY USEFUL and pretty much cover everything involved in trading psychology. 

Some of the other books not mentioned here and for those interested in mechnical/systematic trading systems. Note: All of these books aren't suitable for those who have nil experience/knowlege in share/future trading. 

- *The Trading Game* by Ryan Jones (pure money management book)
- *Smarter Trading* by Perry Kaufman (excellent book on adaptive trading and has an excellent system building checklist)
- *Portfolio Management* by Ralph Vince (lots of maths here as well)
- *Computerized Trading* by Mark Jurik (all sort of topics written by different authors, not bad on certain chapters)
- *Technical Traders Guide to Computer Analysis of the Futures Markets* by Charles Lebeau, David W. Lucas. (haven't got to it yet, but highly recommended by several popular authors)
- *Mechanical Trading Systems: Pairing Trader Psychology with Technical Analysis* by Richard L. Weissman (again, have not read the book yet but highly recommended)


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## Sprinter79 (20 June 2007)

CanOz said:


> Quantitative Trading Systems - Howard B Bandy
> 
> http://www.quantitativetradingsystems.com
> 
> ...





Just being cheeky... does anyone have the word that you need for the password to download the code?


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## Kauri (20 June 2007)

Sprinter79 said:


> Just being cheeky... does anyone have the word that you need for the password to download the code?




   $69.95 should do it...


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## howardbandy (6 August 2007)

Hi Sprinter --

The code (mostly in AmiBroker) is used to illustrate the points made in the book.  It is available for download so that readers who want to verify my results do not have to type it in themselves.  The discussion is more valuable than the code.

Thanks,
Howard Bandy
www.quantitativetradingsystems.com


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## tech/a (6 August 2007)

*Temjin*



> That's why I said previously I have to focus on the psychology in dealing with actually maintaining the system and evaluating it continously. I need to prepare myself when the system does (and WILL) go in a severe drawdown. There are still many psychological issues I need to handle but at the very minimum, the actual execution of trades (entering and exiting) are handled automatically. No more, "ohhh wait, maybe I should wait for the trade to move back up again before exiting, etc, etc". That's the advantage of using a fully automated (server or broker assisted) trading system.




I'm not understanding.
A well tested System will have Maximum Drawdown,maximum string of losses,and a whole host of other numbers.
If tested correctly you'll have a complete record of deviations from mean results to add extreme parameters to the numbers gained on a singular system test.

Decisions on trading the system are then simply black or white---the actual traded system either trades within the numbers or it doesnt.
No wondering/no stress,if it trades within then your trading the system---if it fails then market conditions are outside the system testing parameters and you STOP.

If you DONT HAVE these numbers you dont have a system---just a set of conditions and variables.*This is what most people (Incorrectly) call a system!*


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## tcoates (6 August 2007)

> A well tested System will have Maximum Drawdown,maximum string of losses,and a whole host of other numbers.




I think it would be better to refer to Maximum Drawdown,maximum string of losses as "EXPECTED XXX" as they are based on historical events. Just because it calculated a max losses as 10 for the last 2 years, if you had data for the next 2 years the result could be better/worse.

Tim


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## bingk6 (6 August 2007)

Tech,

I suspect that Temjin has all the numbers that you referred to. I believe that the psychological aspect that he was refering to was the ongoing monitoring and evaluation of the actual system performance relative to the numbers that he has collected from system testing. If the actual system performance is towards to upper bounds of his numbers - no problem, but what do you do when it starts approaching the bottom limits or even starts exceeding them. In your case, you mentioned STOP the system. Stopping the system itself is a huge psychological issue for most people as it means terminating all positions, re-evaluation of where the original strategy went wrong and basically, starting from scratch again. A most deflating experience, often accompanied with significant drawdowns as well.

Admittedly, in all probability, stopping the system when they start exceeding the bottom limits of your known parameters is the correct thing to do, but it is not an easy thing to do.


Temjin,

I am curious as to what setup you have in place to execute the automated system. EG. Which broker do you use, which Software do you use to generate the bug and sell signals and how are these signals transmitted to your broker for execution ?

Guys, Sorry for detouring from the main topic of this thread.


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## tech/a (6 August 2007)

> Admittedly, in all probability, stopping the system when they start exceeding the bottom limits of your known parameters is the correct thing to do, but it is not an easy thing to do.




I must be different to most then.



> I think it would be better to refer to Maximum Drawdown,maximum string of losses as "EXPECTED XXX" as they are based on historical events. Just because it calculated a max losses as 10 for the last 2 years, if you had data for the next 2 years the result could be better/worse.




If tested *correctly *this is NOT the case.
The only reason for numbers to fall outside of the parameters returned during testing will be that market conditions are outside those used in the test period.
Sure it happens but if it does I see this as a great opportunity to include conditions not previously seen during testing.
If trading is contained within the parameters seen during testing so the exectation and indeed the results I have witnessed over the years --- will conform.

Incorrect testing will have numbers being exceeded quickly and on a REGULAR basis.
One systems test of one set of parameters which returns a positive expectancy in a few tests ISNT a guarentee that you have a consistently profitable system.

Back on topic---there are a few books on this---sorry to diverge.


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## Temjin (6 August 2007)

Damn, such an interesting topic to talk about but likewise, I don't want to diverge the topic too. 

One more book to add to the list,

*New Trading Systems & Methods* by Perry Kaufman

A fairly technical book and does give you a head start in the world of adaptive mechanical trading systems and other various "system methods". Had so much headache trying to read this book while on the train everyday.


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## tech/a (7 August 2007)

Temjin said:


> *New Trading Systems & Methods* by Perry Kaufman
> 
> A fairly technical book and does give you a head start in the world of adaptive mechanical trading systems and other various "system methods". Had so much headache trying to read this book while on the train everyday.




Hmm dont have this one from Kaufman
Will go get it thanks!


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## trinity (2 September 2007)

hi,

 I quickly scanned this thread and noticed that most of the books recommended are technical analysis books or psychology of trading books.  Are there any recommendations on books on beginners fundamental analysis?

Thanks


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## Julia (2 September 2007)

trinity said:


> hi,
> 
> I quickly scanned this thread and noticed that most of the books recommended are technical analysis books or psychology of trading books.  Are there any recommendations on books on beginners fundamental analysis?
> 
> Thanks



Trinity,
I'm not sure whether there is a 2007 edition, but if there is, then Martin Roth's "Top Stocks" would probably be useful to you.

Roth discusses more than 100 of Australia's leading companies, but before doing this gives a clear explanation of most of the factors involved in fundamental analysis, e.g. Market Capitalisation, NTA, PER, Yield etc.


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## wayneL (2 September 2007)

There are a few worthy tomes here ==> http://www.moneybags.com.au/search.asp?quick=true&a=74


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## weird (2 September 2007)

Gary Smith, "How I Trade for a Living" is one of the better books I have read. 

Doesn't seem to get an often mention as much as the other books in these similar type of threads . 

Written by someone who actually trades ...


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## nizar (2 September 2007)

trinity said:


> hi,
> 
> I quickly scanned this thread and noticed that most of the books recommended are technical analysis books or psychology of trading books.  Are there any recommendations on books on beginners fundamental analysis?
> 
> Thanks




Its going to be hard to find one better than:
Peter Lynch's One up on Wall Street.

One of the classics IMO...


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## nizar (2 September 2007)

weird said:


> Written by someone who actually trades ...




LOL taking a stab at Van Tharp are we?
His book is great IMO.


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## weird (2 September 2007)

Double post .. oops


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## weird (2 September 2007)

No stab at Van Tharp intended, just that the book by Gary Smith is written by someone who has actually succeeded in becoming a consistently profitable trader.


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## trinity (3 September 2007)

> Its going to be hard to find one better than:
> Peter Lynch's One up on Wall Street.




Thanks Nizar.  I've read that one actually.  Makes good sense, the gist of the book for me is, "buy what you know".



> Trinity,
> I'm not sure whether there is a 2007 edition, but if there is, then Martin Roth's "Top Stocks" would probably be useful to you.
> 
> Roth discusses more than 100 of Australia's leading companies, but before doing this gives a clear explanation of most of the factors involved in fundamental analysis, e.g. Market Capitalisation, NTA, PER, Yield etc.




Thanks Julia.  I've got a copy of it and will start on it and provide feedback.

I just finished Louise Bedford's Trading Secrets.  Was thinking I should toss back and forth between a technical book and a fundamental analysis book.  Chris Tate's book is next in line after "Top Stocks".  And, "Top Stocks" is after  "Real Estate Mistakes" by Neil Janman.  Starting to look for our own property, sick of renting (and I've only been renting for 3 years since I migrated to Sydney).

Thanks.


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## barrett (4 September 2007)

I am no trader, but if Amazon reviews are anything to go by....   on fundamental analysis books they are not entirely useless ... then one of the supposed trading classics is:

"*Trading for a Living*" by Alexander Elder.

This one has been around for a few decades.  More recently he released the slightly creepy sounding

"*Come Into My Trading Room*" (Alexander Elder)

basically the same book, but updated and improved.  Both books have a big focus on investor psychology, the author started out as a shrink and still practises.  The updated book has nearly 100 Amazon reviews, with some very credible sounding ones and an average 4.5 out of 5 star rating, that's unusually high.

Anyone found either of these useful?


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## pavilion103 (16 October 2013)

No idea where to post this. Don't want to start another thread. 

I've read so many posts about recommended trading books. I'm interested to get people's thoughts on any newish (maybe 2012 and 2013) books worth having a look at (that may not have got the attention on the forum). A couple I've had a look at:

Trades About To Happen - David Weiss
Al Brooks - 3 part series. Trends, Ranges, Reversals.


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## tech/a (16 October 2013)

pavilion103 said:


> No idea where to post this. Don't want to start another thread.
> 
> I've read so many posts about recommended trading books. I'm interested to get people's thoughts on any newish (maybe 2012 and 2013) books worth having a look at (that may not have got the attention on the forum). A couple I've had a look at:
> 
> ...




Pav

I've read a lot of books.
I've seen and tested 100s of Ideas.

*2 things.*

There must be a Macro Economic reason for a longer term move. Positive or Negative.
Shorter term moves must be traded in the context of the trend in that timeframe.

Anything written will work in the correct circumstances.
In fact in a screaming bull market anything works.
There is NO magic way of trading something profitably *AGAINST* a trend.

Personally I think you need to know "When and where a major turning point is likely to occur or where it has occurred" So books on How to. Or books on Why--If----then this may happen.

*AND*
How to trade short term moves long and short. Anything is good as they all work in the right situation.

Lastly if your only trading / investing stocks then your right up against it.
You should know how to trade futures and if long term investing---using them as a hedge.

20 yrs in a nut shell.


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## CanOz (16 October 2013)

I have a free PDF from the CME on Market Profile Pav. 

Here is the link...

I really think you would relate so well to this, it is volume analysis after all....

Steidlmayer's comments that it doesn't work anymore were directed at the concept of Initial Balance or opening range. He only meant that because the markets are mostly 24 hours now, the IB does not have the emphasis it used to...Learning to interpret MP IMO will help you determine what Tech has mentioned, key areas where the market could turn...areas where you can determine the risk easily. It won't teach you how to trade, but it will give you some solid areas for trade location.

Enjoy!


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## Caveroute (16 October 2013)

pavilion103 said:


> No idea where to post this. Don't want to start another thread.
> 
> I've read so many posts about recommended trading books. I'm interested to get people's thoughts on any newish (maybe 2012 and 2013) books worth having a look at (that may not have got the attention on the forum). A couple I've had a look at:
> 
> ...




Al Brooks - I'm no expert, but one of the things  I have learnt  [read often enough] is that you need to decide on an approach, and refine/make that approach work of you. 

That's a Radgism as well I think, one he uses to explain why his 2nd hand 'for sale' book collection is so large -  throw all your books away, there is no holy grail, find something, stick with it , make it work.

Al Brook's is stuff is based on Edwards and Magee's material, pre-computers, paper charts and a ruler - no volumes, no indicators, no fibs, no Elliot wave, no VWAP's. no ladders, nothing except candlestick analysis, context, trendlines/channels, support/resistance, traps and  maybe a 20 period  ema - but it still works, on any timeframe on any liquid instrument.

BUT - its not for the faint hearted, his style is his style and it's not an easy ride. 

The good news is there is another site priceactiontrading.com - which is Brooks simplified - offers a daily ES analysis video which is very useful. 

Brook's own site also has a daily video of the ES, but man it's heavy, to heavy for me.

Brooks also does a ppt training course, well worth $250 if you want to get into his stuff - this covers everything you would probably ever need to know.


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## pavilion103 (18 October 2013)

Thanks guys. Much appreciated.

Tech, do you see any value in my flicking through the Too Stocks 2014 book and using my technical analysis skills to see if any are good? Or not much point? 

I only asked because I got the email from the educated investor today.

Not placing too much weight on this. Just an idea.


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## Trading Tools (29 October 2013)

I don't have one "best" trading book as I've found a variety of books which cover an individual topic really well... bit like trading in the sense there is no single best/magic formula. Below however are what i feel are some great titles/authors to consider (for varying reasons).

Nicolas Darvas – “_How I Made $2,000,000 In The Stock Market_” 
Don’t let the title fool you... this is not a technical “how to” book, or detailed manual/plan (and is not even a detailed lesson on the Darvas Box System), and I’m not recommending it for the specific TA strategies or anything like that, however it offers some excellent “bigger picture” lessons.

Easy quick reading, entertaining and I believe it is a really insightful book PROVIDED you’re seeing the “bigger picture” lessons it has to offer, to become a consistently profitable trader over the long term such as:

Must develop a personalised plan and find what works for YOU;
This plan MUST have a proven positive expectancy (a positive edge), as no-one knows what will happen next after their trade is placed.... trading is an odds based endeavour and we are constantly forced to make decisions in the face of uncertainty, therefore a tested proven plan that has positive expectancy over a large number of trades is imperative (and a too often overlooked aspect by many traders I believe);
Trading without a proven plan that has positive expectancy (a positive edge) will almost always lead, in the long term, to loss of capital;
Execute your plan with discipline, consistency and patience;
Listening to market noise, rather than following your tested system, generally will lead to poor or ad hoc decision making which invariably leads to inconsistent and/or poor/negative returns;
The importance of recording/journal all your trades, then review and analyse the results.
Even though the book is certainly old now, there really are some valuable lessons to learn about the bigger picture of trading.
If reading this book helps to reinforce how important the above points are to become a consistently profitable trader over the long run, then you will have spent your time very well by reading it.

Other good titles I believe worth considering include:

Richard L. Weissman – “_Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House_” (reinforcing the utmost importance of finding, understanding & having confidence that you do have a tested positive edge system over a large number of trades along with managing risk)
Mark Douglas – “_Trading in the Zone_”
Denise Shull – “_Market Mind Games: A Radical Psychology of Investing, Trading and Risk_”
Stan Weinstein – “_Secrets For Profiting in Bull and Bear Markets_” (mainly for his explanation of Market Structure and the 4 key market phases)
Brett Steenbarger
Cheers
Stuart


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## Bort (8 June 2014)

surfingman said:


> Can anyone recommend a book on Technical Analysis? I am thinking of buying Chart Your Way to Profits: The Online Trader's Guide to Technical Analysis by Tim Knight




What is your timeframe?


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## Bort (8 June 2014)

weird said:


> Gary Smith, "How I Trade for a Living" is one of the better books I have read.
> 
> Doesn't seem to get an often mention as much as the other books in these similar type of threads .
> 
> Written by someone who actually trades ...




I would have Gary Smith in my short list (which would actually be reasonably long). 

If you are not a totally mechanical position trader in equities this book is worth a read. 

Anyone who has done the day to day in equity markets for long enough knows you need to be heavy market leaders around turning points to trade the swings. This book gets that home and this guy only traded long. Really shows if you have setups and you know them and you commit money to the market you can run up a track record you can retire on. 

Plenty of others out there that are good but this guy is open about his own trading. Not a bible like  Van Tharp or Options as a strategic investment but worth a read once and doesn't often get a mention.


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## banco (8 June 2014)

Bort said:


> I would have Gary Smith in my short list (which would actually be reasonably long).
> 
> If you are not a totally mechanical position trader in equities this book is worth a read.
> 
> ...




I get the impression Gary Smith was the beneficiary of the 90's bull market more than anything else. 

Marty Schwartz Pitbull book is very good.


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## Bort (9 June 2014)

banco said:


> I get the impression Gary Smith was the beneficiary of the 90's bull market more than anything else.
> 
> Marty Schwartz Pitbull book is very good.




There have been a few equities bull markets since the 90's...

There a plenty of organized books with decent ideas. In my opinion there are only so many that leave you with some insight into the construction of the traders processes or provide an insight to their record.

Trader Vic does give this. Trading Chaos is one that you can see how the trader has constructed their ideas. While I'm not big on DeMark he certainly spent time thinking about gauging the market. Elder provides readers clear ideas how he built his methodology. 

Everyone knows Van Tharp but he could expand his quote to be 'one can only be successful if he trades his own methods'.


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