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Best trading book

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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.

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. :)
Click to expand...

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
 
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.


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. :)
Click to expand...

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.
 
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.
Click to expand...

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.
 
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)

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
Click to expand...

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)
 
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
 
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.
Click to expand...

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

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
 
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.
 
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.
Click to expand...

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.
Click to expand...

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.
 
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. :D
 
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. :D
Click to expand...

Hmm dont have this one from Kaufman
Will go get it thanks!
 
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 :cool:
 
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 :cool:
Click to expand...
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.
 
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 ...
 
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 :cool:
Click to expand...

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

One of the classics IMO... :2twocents
 

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