# Recommended Books/Websites?



## JackJackJack (23 November 2007)

Hi All,

Can anyone recommend any really good books?
The ones that everyone agree are the best for Australian investing. All so any really good websites?
(Apart from this one - which is easily the best I have seen thus far).

Thanks

Jack


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## chewy (23 November 2007)

I've read a heap lately - Taming the Lion by Richard Farleigh is probably the one have enjoyed and gotten the most out of.


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## SevenFX (23 November 2007)

Here a good Site Jack.

Great for chart patterns, stragerties & much more.
http://stockcharts.com/school/doku.php?id=chart_school

Cheers
SevenFX


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## BBand (23 November 2007)

Hi Jack,
If you want a book that has it all, checkout www.learn-to-trade-markets.com
Best money that I have ever spent !! WORTH EVERY CENT (about 800 pages
). It is in ebook format, but printable.

Karl Richards is the author, he is a fund manager and private trader (I think in the UK)

He has a new ebook due for release early next year on Elliot Wave/Fibonacci. This book promises to introduce readers to an indicator which will take the whole ambiguity out of reading Elliot Waves - I'd like to see that !!

Anyway - have a look - it costs around US$100.

The reason I know about the new book (New Trading Dynamics) is because I asked him if he had any other books on the market

Hope this is useful. 

Good trading
Peter


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## howardbandy (23 November 2007)

Hi Jack --

I am the author of "Quantitative Trading Systems" which discusses the design, testing, and validation of trading systems.  The techniques it describes apply to all stocks, funds, and futures in all markets.

It has been well received all over the world.  We are based in the US, but about 40% of all books sent to overseas addresses go to Australia.  

There are several threads in this forum that I have posted to.  You can get a feeling for my ideas from those.  Or go to the book's web site and read the preface, contents, index, and two complete chapters.  There is a page devoted to testimonials and reviews of the book.

The resources page gets a lot of hits and might have some links that are useful to you.

Thanks,
Howard


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## RichKid (24 November 2007)

JackJackJack said:


> Hi All,
> 
> Can anyone recommend any really good books?
> The ones that everyone agree are the best for Australian investing. All so any really good websites?
> ...




JJJ,
There are existing threads on these two topics, please use the search tool in the toolbar above, you'll be well rewarded by the results.


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## nizar (24 November 2007)

JackJackJack said:


> Hi All,
> 
> Can anyone recommend any really good books?
> The ones that everyone agree are the best for Australian investing. All so any really good websites?
> ...




Hi Jack,

On my blog there is alot of information which you may find useful.
There is a list of recommended reading there, and also a post which is full of links to internet resources (many of them links to threads on this board).

Should be a good start.


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## JackJackJack (26 November 2007)

Thanks guys.

Lots of interesting stuff there.

Jack


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## wildkactus (26 November 2007)

a couple of book's that i found good.

Trading for a living & Come into my trading room by alexander elder

And i'am just reading his latest Entries & Exists which is not bad so far.
It's a about 16 differnent traders and a look at there trading style life.

all the best in trading


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## lamot1 (11 December 2007)

Hey Jack,

Start at the ASX website, they have heaps of great info there for new and first time investors, I found this an excellent introduction to the market. They also publish some really good book about starting out and trading Australian shares. These include good coverage on both technical (charting) and fundamental (valuation) techniques along with information on the market sectors and indices. 

Having said that I find that there is no better lesson than losing your own hard-earned money, as long as you learn from it. I started out paper trading for a while, which looking back, has saved me a whole bunch of pain.


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## ithatheekret (11 December 2007)

I have a stack of Darryl Guppy books , just excellent , read them over and over .

Also , I must have just about every book Louise Bedford has published . 

A must I would say for Japanese Candle users .


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## Scuba (14 December 2007)

ithatheekret said:


> I have a stack of Darryl Guppy books , just excellent , read them over and over .
> 
> Also , I must have just about every book Louise Bedford has published .
> 
> A must I would say for Japanese Candle users .




ithatheekret, I had one of Louise Bedford's books in my hand this afternoon "trading secrets" (v2)? I had the same book in my hands yesterday and walked with Roger Kinsky's "Teach yourself about shares." I had the feeling today (as I looked at Bedford's) I walked with the lesser of two books...
Care to comment?
May have just solved it myself, nowhere can I see candlestick mentioned in the glossary...  OH well, "nothing ventured, nothing gained"


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## Magdoran (15 December 2007)

Scuba said:


> ithatheekret, I had one of Louise Bedford's books in my hand this afternoon "trading secrets" (v2)? I had the same book in my hands yesterday and walked with Roger Kinsky's "Teach yourself about shares." I had the feeling today (as I looked at Bedford's) I walked with the lesser of two books...
> Care to comment?
> May have just solved it myself, nowhere can I see candlestick mentioned in the glossary...  OH well, "nothing ventured, nothing gained"



Hello Scuba,


I tend to agree, I don't have a high opinion of Bedford at all.  

I also have some Guppy books on my shelf, and they don't rate much higher.

They've gathered a lot of dust, probably because I view them as training wheels - the kind that don't teach you very good habits or perspectives.  But that's just my personal perspective.  Other's may have a different perspective.

I just think if people are looking for good technical analysis books, the ones I listed years ago in the threads Richkid was referring to still stand up today...

Now I'm not certain of this since I can't verify the source, but a rumour (and that's all it is) was circulating that Bedford had embarked on a Gann or time cycle style of technical analysis - can anyone confirm this?


Regards


Magdoran


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## CFD (15 December 2007)

A bit off topic but welcome back to the forum. Look forward to seeing your post again.


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## Scuba (17 December 2007)

Hi Magdoran,
Hmmm, training wheels. Like they say, small steps first.

I await with interest any further posts in response to your question...


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## Magdoran (18 December 2007)

CFD said:


> A bit off topic but welcome back to the forum. Look forward to seeing your post again.



Thanks CFD,

I'll try to visit as much as time allows.  Missing the nice Australian summer here...

Appreciate the well wishes, nice to hear from you too!


Mag


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## Magdoran (18 December 2007)

Scuba said:


> Hi Magdoran,
> Hmmm, training wheels. Like they say, small steps first.
> 
> I await with interest any further posts in response to your question...



Hello Scuba,


Yes, I'd love to know if Bedford converted to a geometric style or not...

As for training wheels, if you read through my various posts on several technical analysis threads, I make a case for getting the right information to beginners as soon as possible using the analogy of learning music.

The idea is to foster the right aspects of trading from the start, and that learning the wrong things can actually damage new traders and have to be "unlearned" in order to progress.

Hence my comments about getting a good diet of information, rather than being fed on poor quality brain food...  But that's my opinion, but if you take the time to read through the arguments, you'll get a sense of where I'm coming from...


Kind Regards


Magdoran


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## RichKid (18 December 2007)

Magdoran said:


> Hello Scuba,
> 
> 
> Yes, I'd love to know if Bedford converted to a geometric style or not...
> ...




So the musing recommences! Nice to see your posts again mag. 

As I am someone who is attempting to discard some bad habits it's refreshing to read your comments. The word 'creative' often springs to mind in relation to TA, especially in your discussions. I am currently looking at that concept in the context of position sizing, Van Tharp has been explaining the benefits of creative money management for years. Ryan Jones is another who has done some thinking in that area. Ideally, we will marry creative TA with creative mm and personal psychology to create a consistent and enjoyable methodology for trading the markets. (I mean 'personal' in the sense of a method for managing yourself that best suits you (personalized psychology?), rather than crowd psychology or general concepts of psychology).

PS For books on the topics above, try existing threads and posts, best to continue the discussion in those threads.


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## Magdoran (19 December 2007)

RichKid said:


> So the musing recommences! Nice to see your posts again mag.
> 
> As I am someone who is attempting to discard some bad habits it's refreshing to read your comments. The word 'creative' often springs to mind in relation to TA, especially in your discussions. I am currently looking at that concept in the context of position sizing, Van Tharp has been explaining the benefits of creative money management for years. Ryan Jones is another who has done some thinking in that area. Ideally, we will marry creative TA with creative mm and personal psychology to create a consistent and enjoyable methodology for trading the markets. (I mean 'personal' in the sense of a method for managing yourself that best suits you (personalized psychology?), rather than crowd psychology or general concepts of psychology).
> 
> PS For books on the topics above, try existing threads and posts, best to continue the discussion in those threads.



Thanks Richkid!

Nice to see you're still posting too!


Mag


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## BBand (24 December 2007)

Hi Jack,

Have a look at www.advfn.com. 

Its a pretty interesting site

Peter


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## doctorj (5 February 2008)

I want to put in a big plug for Nassim Nicholas Taleb's ‘Fooled by Randomness’.  Whilst not strictly a trading book, the topics are very relevant and, as a trader, Nassim has a lot of relevant examples and discussion.  

Has anyone else read this or the ‘Black Swan’? I’d be very interested to hear what the derivative guys think about his ideas and the application to pricing risk, particularly in light of sub-prime.


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## kingie_d (5 February 2008)

I recently read Van Tharps "Trading your way to Financial Freedom" 2nd Ed on the advise of someone on this site. I'm still a newbie trader but I've spent lots of time and money reading up on everything I can get my hands on about trading. I have to say that Van Tharps book is one of the best I've read about putting your own system together. It covers pretty much all aspects of trading - not just entries - which I found alot of books do.
Highly recommended to anyone who hasn't read it yet ( although I'm probably the last person here to read it! )


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## howardbandy (6 February 2008)

doctorj said:


> I want to put in a big plug for Nassim Nicholas Taleb's ‘Fooled by Randomness’.  Whilst not strictly a trading book, the topics are very relevant and, as a trader, Nassim has a lot of relevant examples and discussion.
> 
> Has anyone else read this or the ‘Black Swan’? I’d be very interested to hear what the derivative guys think about his ideas and the application to pricing risk, particularly in light of sub-prime.




Greetings --

I have read both, and recommend both.  Both are highly recommended (by me) for anyone involved in developing trading systems.  They both point out that low-probability, high-risk events are the ones that cause big losses in trading accounts.  System developers have a hard time preparing for and dealing with low-probability events since they occur so seldom.  

I think the world financial markets have a potential risk, perhaps to be triggered by the problems with sub-primes.  While many tradable issues appear to be uncorrelated during stable market conditions, everything is correlated during panics.  People who need to raise cash sell whatever is liquid.

Thanks,
Howard


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## howardbandy (6 February 2008)

kingie_d said:


> I recently read Van Tharps "Trading your way to Financial Freedom" 2nd Ed on the advise of someone on this site. I'm still a newbie trader but I've spent lots of time and money reading up on everything I can get my hands on about trading. I have to say that Van Tharps book is one of the best I've read about putting your own system together. It covers pretty much all aspects of trading - not just entries - which I found alot of books do.
> Highly recommended to anyone who hasn't read it yet ( although I'm probably the last person here to read it! )




Greetings --

I agree that Tharp's book is worth while.  The second edition is much better than the first.

However, I have a difference of opinion with him on two major points:

One, the issue of neuro-linguistic programming.  Tharp is a psychologist and an expert in this field, and he wants to apply it to trading.  He, and other psychologists who work with traders, want to help the trader become comfortable with the system they are trading.  I think that is backwards.  If the trader begins by defining the features of a trading system that he or she will be comfortable trading, encodes those into an objective function, and designs trading systems that score well using that objective function, then the issue of cognitive dissonance and the need for trading coaches fades.

Two, the issue of the number of trades necessary to have confidence in your system.  You can do whatever you want to while developing your system.  The data that is used during development is called the in-sample data.  After you are satisfied with the system, the tests run over the in-sample data will be good.  They are always good -- we do not stop playing with the system until they are good.   However, those results from tests of the in-sample data have no value in predicting how the system will perform in the future.  No value.  None.  No matter how many closed trades.  Thirty is not enough, 30,000 is not enough.  The only way to estimate future performance is to test the system using data that has not been used at all during development of the system.  That is called out-of-sample data.

Thanks,
Howard


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## nizar (6 February 2008)

howardbandy said:


> Greetings --
> 
> I have read both, and recommend both.  Both are highly recommended (by me) for anyone involved in developing trading systems.  They both point out that low-probability, high-risk events are the ones that cause big losses in trading accounts.  System developers have a hard time preparing for and dealing with low-probability events since they occur so seldom.
> 
> ...




Thanks Howard for that overview.
I'll put those books on my list.


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## julius (6 February 2008)

Hi Howard,

What other books do you reccommend, relevent to trading in general ?

With your background, I'm sure you've read just about everything that's out there ...

Cheers, good to know you still read the forums


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## doctorj (6 February 2008)

howardbandy said:


> Greetings --
> 
> I have read both, and recommend both. Both are highly recommended (by me) for anyone involved in developing trading systems. They both point out that low-probability, high-risk events are the ones that cause big losses in trading accounts. System developers have a hard time preparing for and dealing with low-probability events since they occur so seldom.
> 
> ...



I have to admit, I'm yet to finish them but, so far it hasn't varied too much from interviews I've heard with Taleb (aside from the fact he's much kinder to Journalists in interviews).  It's all very interesting, but I wonder at the practical application of it to trading.  So far it seems to boil down to two things well worn concepts (hmmm I wonder what he'd say about gross over-simplications), Sharpe Ratio and Risk Management through position sizing and stop losses.

I'm also still formulating my opinion on the matter, but to this point I have three thoughts:
1) How well do the common risk management strategies deal with events that are several (3, 4, 5??) deviations from the mean, particularly as these events can result in highly correlated markets across asset classes?  How well can we manage these non-linear risks?

2) If we accept that for some asset classes it isn't a zero sum game, this would result in a positive skew to the distribution of returns probably through both a shift of the distribution to the right and a fatter tail at the right end.  This would mean that being on the long side of the market and taking more risk than average would exhibit a more favourable sharpe ratio (on average) than those that manage their risk more aggresively.

3) Given Taleb's beliefs, how the hell does he trade?  Does he treat movements as entirely random and just apply prudent risk management?


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## MS+Tradesim (6 February 2008)

howardbandy said:


> Greetings --
> 
> I agree that Tharp's book is worth while.  The second edition is much better than the first.
> 
> ...




I can't agree with this. Tharp does *not* want to make people comfortable with their system *prior* to development. You are seriously misrepresenting or misunderstanding him here. He emphasises objective system development based on your style and personality. It is when a person *has* such a system but still has trouble following it that he advocates psychological work to make the person comfortable with their system.


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## Temjin (6 February 2008)

howardbandy said:


> Two, the issue of the number of trades necessary to have confidence in your system. You can do whatever you want to while developing your system. The data that is used during development is called the in-sample data. After you are satisfied with the system, the tests run over the in-sample data will be good. They are always good -- we do not stop playing with the system until they are good. However, those results from tests of the in-sample data have no value in predicting how the system will perform in the future. No value. None. No matter how many closed trades. Thirty is not enough, 30,000 is not enough. The only way to estimate future performance is to test the system using data that has not been used at all during development of the system. That is called out-of-sample data.
> 
> Thanks,
> Howard




And this one as well. Maybe I missed it in his books, but I personally do not recall him NOT HINTING the importance of out of sample data while testing systems. He did mention at least 30 samples are needed for predictive values, and that is something I do not agree as the more samples (out of sample, clean, untested data), the better it is. 

Maybe he really didn't mention out of sample data testing, I could have missed it or mistaken it from other books. However, I was pretty sure I was NOT not taught on the importance on that in his books.


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## howardbandy (7 February 2008)

Greetings all --

First, I'll repeat that I Do Recommend Dr Tharp's book, "Trade Your Way to Financial Freedom," second edition.

Second, I'll stand by my comments about the book's lack of information about selecting the method by which the goodness of any alternative is measured.  There is no serious discussion of any metric other than expectancy -- R, in his terms.  Expectancy is very important and very poorly understood.  And Dr Tharp is performing a great service by introducing it to a wider audience.  But expectancy alone makes a very poor metric for choosing among alternative trading systems -- systems chosen for high expectancy often have equally high drawdown.  There are Much better metrics by which to evaluate systems and alternative choices in designing them.  And there are techniques for creating and using complex objective functions that can include expectancy as one of the components.  None of that is discussed.  He does suggest choosing an appropriate time frame and picking trend-following or mean-reversion, but those are trading system design choices, not metric choices.  

Third, I'll stand by, and emphasize, my comments about the book's lack of any information about the importance of using out-of-sample tests.  There is not a single substantive mention of optimization, in-sample, out-of-sample, walk forward, statistical significance or any related terms in the table of contents, the glossary, the index, or on any of the text pages.  In fact, he goes out of his way to avoid discussing those topics.  By the lack of mention of the importance of basing decisions on out-of-sample tests, his suggestions regarding stop placement, position size, and so forth imply that use of in-sample results is acceptable, is expected, and that is what the text is using. 

Out-of-sample testing is probably the Single Most Important concept of trading system development.  It is trading's equivalent of the double-blind tests made by pharmaceutical companies before drugs are released.  

There is no relation between the performance of a trading over its in-sample data and the likelihood of its performance when trading with real money tomorrow.  The in-sample results are Always good.  We do not stop fiddling with the system until they are good.  The better the in-sample results are, the worse the out-of-sample results are likely to be.  There is no way we can tell by examining the in-sample results whether those results were achieved because the algorithm is accurately measuring some profitable feature of the market or is just curve-fit to the data.  No way.  None!    

For example, I have documented trading systems, plural, that each have over one million closed trades in the in-sample period, yet are not profitable out-of-sample.

Making trading decisions based on nothing but in-sample results is extremely hazardous to account balances.

Yes, read Van Tharp.  What he does say is worth while.  But do not stop with his book.  Include some others that describe the processes of objective function design, in-sample / out-of-sample analysis, and walk forward testing.

Thanks for listening,
Howard


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## nizar (7 February 2008)

doctorj said:


> I have to admit, I'm yet to finish them but, so far it hasn't varied too much from interviews I've heard with Taleb (aside from the fact he's much kinder to Journalists in interviews).  It's all very interesting, but I wonder at the practical application of it to trading.  So far it seems to boil down to two things well worn concepts (hmmm I wonder what he'd say about gross over-simplications), Sharpe Ratio and Risk Management through position sizing and stop losses.
> 
> I'm also still formulating my opinion on the matter, but to this point I have three thoughts:
> 1) How well do the common risk management strategies deal with events that are several (3, 4, 5??) deviations from the mean, particularly as these events can result in highly correlated markets across asset classes?  How well can we manage these non-linear risks?
> ...




Some great questions there Doc, im looking forward to the responses.


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## rub92me (17 June 2008)

I enjoyed reading 'Fooled by Randomness'. I saw Nicholas Taleb has a new book out titled 'Black Swans'. Anyone read this yet and if so, is it worth reading or is it just a re-hash of the same ideas?


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## It's Snake Pliskin (17 June 2008)

rub92me said:


> I enjoyed reading 'Fooled by Randomness'. I saw Nicholas Taleb has a new book out titled 'Black Swans'. Anyone read this yet and if so, is it worth reading or is it just a re-hash of the same ideas?




It is a whole lot more in depth and has confirmed some of my thoughts.
It isn't an easy read purely for the concepts and terminology etc that he uses. If you are looking for trading answers you may not find them. But I liked the part on prediction.


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## Wysiwyg (18 July 2018)

The list under Pages has sound knowledge and fascination for traders. 

https://jesse-livermore.com/


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## ASFscalp001 (25 July 2018)

great thread! I am sure I’ll find something interesting and knowledgeable to read from these book recommendations.


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