Trading books versus forums

[Timmy]

This is a bit of a rant.

Before I get to my point, let me talk about trading software, specifically “black-box” trading software, the type that spits out (or spews, or excretes, depending on the level of invective desired) buy and sell signals so you are guaranteed to make so much money you will be living in the Whitsundays/trading from the beach/driving a Ferrari(s)/dating supermodel(s)…whatever.

Now, we all know that such black-box programs are rubbish, if they could do what the promoters promised why would the promoter be selling it at $3,000 (prices may vary)? BUT, such products have allure, they promise untold riches for very little effort – everything you need, in one place, a complete package, for a one-time fee. (Just to reiterate, they don’t work, I am merely making a rhetorical point here).

OK, so now onto trading-related books compared to forum posts/threads. I would argue there is a role for trading-related books of the really basic kind, introductions to what an equity is, what a sharemarket is, what a P/E is, etc. BUT, I would also argue that any book that purports to offer a method of trading is merely a low-tech version of the black-box software. (OK, point of difference, in a book the method of generating that super-secret indicator will have to be revealed, else how could you apply it, but it is only revealed to you, the reader, we wouldn’t want everyone using it, right?).

The book – it has the allure of the info being in one place, easily accessible, in one place, for a one-time fee.

Now, let’s look at the trading-related forum, like the one you are now viewing. Anyone can post here (subject to terms and conditions and policies)… so where is the quality control? (Hmmmm, I reckon you could easily ask that same question of some of these trading-related books I have seen, a point to which I will return – sorry I do ramble on). If anyone can post, how do you know which posts/threads will contain valuable information/knowledge/wisdom? Finding the gems is hard work, ya gotta read a lot, sift, research, compare, test…actually that all sounds like a really good idea…

So, the forum does not offer the “advantages” of the software or the book – it is not all nicely packaged, the really valuable info, the gems, are hidden. They are not served up in a package, but they are here.

My point … there are VERY FEW trading-related books of value. There is much more valuable information available on forums, but it takes work to find it.

OK, back to quality control of books. I have read many trading-related books, but three stand-out for me as being of the worst kind of rubbish I have ever read.

Two I had the good fortune of borrowing from a public library…one I picked up in a bookshop and put back after the merest perusal. One from the library offered to explain the workings of Gann. Now, I am no fan of Gann really, but I can appreciate that some people put in a lot of effort and time into studying his methods, and good luck to them. But this book contained, as far as I could tell … pretty much nothing beyond what could be found on a webpage providing the merest outline of his methods. Where’s the quality control?

The second library book was about system design, again, nothing beyond the most basic of concepts and piles and piles of tables showing ‘results’ of one test or another. It was like a blog - not that there’s anything wrong with that – but where’s the quality control?

The third, the book I perused in the bookshop, was from a well-known author, must have been his 10th book or something (isn’t that a warning in itself…) it was a mere rehash of earlier work, and some the examples used were from markets 10 years ago – now there’s nothing wrong with that, but it does suggest laziness to me (cut 'n paste), or maybe the ‘pattern’ being illustrated was so rare…

<rant complete>

 

[howardbandy]

Re: Trading books versus Posts/Threads

Hi Timmy --

At the risk of re-igniting your rant --

I am the author of a book that is not a trading systems book, but rather a book to help you design, test, and validate trading systems of your own design. And, in the process, suggest some techniques for debunking the snake oil salesmen.

My book is "Quantitative Trading Systems." You can read the book's preface (where you will find that I share many of your views), contents, index, and two complete chapters at the book's web site (click the link below my signature). The book has been shipped to over 35 countries, with about 40% of overseas (referenced from the US) sales going to addresses in Australia.

I have made a few postings to forum threads on ASF. A search for my name or the book's name will bring them up.

My point is -- there are not many publications that are intended to help, but there are a few.

Thanks,
Howard

 

[sutti]

Re: Trading books versus Posts/Threads

You bought up some great points Timmy. I think the best way to go about learning about the stock market is trial and error, doing your research and creating your own "trading principals". For some this way is obviously going to be hard because it involves putting your own money on the line.

What you said about books is right as well. There are a lot of really bad ones that just talk crap. I think there are still some fantastic books you can read on the subject like stuff by Benjamin Graham. Books like those and fantastic for any beginner who wants to become a smart and serious investor.

I think most people know about those types of scammy software and if they think there going to work for them they properly need their head checked.

 

[dutchie]

Re: Trading books versus Posts/Threads

G'day Timmy

I agree that black boxes are usually rubbish (and usually expensive).

I also agree that there are many books written on share trading that are rubbish. But there are some good ones too.

"but where’s the quality control?" - the answer to this is question is - the internet.

There is so much free information on the internet about share trading that I am sure you could become a successful trader without buying one book or buying one black box software package.

The main problem with this approach is having the time and patience (subduing the urge to start trading) to educate yourself.

Once you start educating yourself for free, on the internet, you get a better feel for what are good books (and software charting packages) to buy (that may suit your type of trading).

This information is available from book reviews, forums, ASX, other stock exchange sites, free ebooks, free charting sites etc etc.

Cheers

Dutchie

PS Timmy,this reply is not aimed at you but to beginners.

 

[Timmy]

Good feedback thanks ... I have calmed down a bit now

 

[jman2007]

Good feedback thanks ... I have calmed down a bit now

Timmy,

I used a book called "Top Resource Stocks 2007" when I first got into investing. The 08 version is also out now. It basically cuts out all the bs and gives a 1-page summary of 45-50 top resource companies on the ASX for that year. It doesn't necessarily advocate buying any of them, but provides facts and figures for what made company ABC successful, their strengths vs weaknesses and future sp triggers. Highly recommended.

I find ASF pretty good all-round really, but I discovered that certain users having preference for different trading styles and strategies (eg tech/a vs a chartist) means you need to take this into account and decide if this information fits in with your long-term goals.

jman

 

[Yeti]

Thanks Timmy, I enjoyed that. Please have another rant whenever you feel like it. Or you could write a book and title it "The trader's guide to trading guides." Complimentary copies to all ASF members of course

...must have been his 10th book or something (isn’t that a warning in itself…)

So true...