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Some highly recommended books


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Some highly recommended books

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 Big Mike 
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Here is a short list of books I've read and recommend. I am not a big reader of books in print, I tend to prefer on-line methods... but nonetheless, these are great reads and contain a lot of information that helped me.


My favorite to read, and the one where I tended to relate the most, was Martin Schwartz's "Pit Bull". The other books are on every trader's "must have" list, so if you haven't read them already, then do yourself a favor and pick them up. The last one is a compilation of chart patterns and how to trade them by Suri Duddella, it is a fantastic reference to understand what is going on behind your favorite indicators.

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tortexal
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Highly recommended for his mathematical formulas to manage all types of risk. R multiples i find very useful and use.

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 Alan 
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Another great book is Trading for a Living. I highly recommend this book.

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Maletor
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These are the three books that belong on every trader's book shelf.

Especially the one by Edwards and Magee. These guys invented trading.

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 Big Mike 
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Alan View Post
Another great book is Trading for a Living. I highly recommend this book.

Hi Alan,

I am reading this book right now. So far I am enjoying it. I sought a book specifically dealing with Money Management and Psychology, and this book is hitting on that perfectly.

Mike

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 MXASJ 
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Elder's "Come Into My Trading Room" is also good. Not so much for the indicators but for the process. "Sell and Sell Short" is his latest. It came out in H2 2008... very timely .

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 zeller4 
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Mike,

along with MXASJ's comment about Alexander Elder's Come Into My Trading Room, there's a companion book:

Study Guide for Come Into My Trading Room

It's an excellent resource.

Kirk

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 caprica 
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Is there a way to mark this thread as a favorite so I can come back to it later?

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 wh 
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Amazon.de: Bücher: Das Große Buch der Markttechnik

https://www.grube-trainings.de/pdfs/gewinnenbeginntinnen.pdf

good german books

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 George 
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These two books will provide you with information that will help you understand further how things are connected and the minds implication in all of this.

/George

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 zeller4 
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caprica View Post
Is there a way to mark this thread as a favorite so I can come back to it later?

since you posted here, it should already be in your subscribed threads.

Look under the Quick Links pulldown in the upper right of the window.

kz

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 record100 
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I definitely reccomend this book. Besides, Carter is the trader, not like many other authors

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 record100 
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also for those who are not in the hype of the day trading, this book might be interesting

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 Moondialman 
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In addition to the listings above I've found the following either directly useful or interesting background:

Link - High Probability Trading
Technical Analysis Of The Financial Markets - Murphy
Momentum, Direction And Divergence - Blau
Mesa And Trading Market Cycles - Ehlers
Fortune's Forumula - Poundstone
Against The Gods, The Remarkable Story Of Risk - Bernstein
Fooled By Randomness - Taleb
The (Mis)behaviour Of The Markets - Mandelbrot

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 wh 
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This is more then a programming book this is a cook book:



Numerical-Library-Java-Scientists-Engineers

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 DiemTrader 
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Another good one for the mind:



Amazon.com: TNT: The Power Within You: Claude M. Bristol, Harold Sherman: Books

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 Big Mike 
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Gary uploaded to the file sharing section an interesting ebook. The author is Markus Heitkoetter, the book is The Complete Guide to Daytrading.

Amazon.com: The Complete Guide to Day Trading: A Practical Manual From a Professional Day Trading Coach: Markus Heitkoetter: Books

For whatever reason he made the book available for download for free. It's in our file sharing section (courtesy of Gary) here:


I skimmed the book. It has a some good sound advice but is really written for beginners or for people that have so far ignored the good sound advice of others. The forum has plenty of both

Mike

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Elliott Wave
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Here is my list.


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 deltason 
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Here are some in no particular order.

Master the Markets - Williams
Reminisces of a Stock Operator - LeFevre
The Logical Trader - Fisher
The Ultimate Trading Guide - Hill, Pruitt, Hill
The Trading Method That Can Make You Rich - Kelly
Trading with the Odds - Kase
Think and Grow Rich - Hill
Trading for a Living - Elder
How to Make Money in Stocks - O'Neil
Trading Classic Chart Patterns - Bulkowski
Maximum Adverse Excursion - Sweeney
Market Wizards - Schwager
The Definitive Guide to Point and Figure - du Plessis
The Secret Science of Price and Volume - Ord
The Three Skills of Top Trading - Pruden
Long-Term Secrets to Short-Term Trading - Williams
Trading in the Zone - Douglas
Technical Analysis Explained - Pring
Way of the Turtle - Faith
The New Science of Technical Analysis - DeMark
The Profit Magic of Stock Transaction Timing - Hurst
Pit Bull - Schwartz
How I Made $2,000,000 in the Stock Market - Darvas
Street Smarts - Connors and Raschke
High Impact Day Trading - Barnes
Cracking the Money Code - Williams
Getting Things Done - Allen
New Market Timing Techniques - DeMark
Secrets for Profiting in Bull and Bear Markets - Weinstein
The Relaxation Response - Benson
Methods of a Wall Street Master - Sperandeo
Focal Point - Tracy
Trade Your Way to Financial Freedom - Tharp
Intermarket Analysis - Murphy
The Brain That Changes Itself - Doidge
Trade Chart Patterns Like the Pros - Duddella
Mastering the Trade - Carter
Profitability and Systematic Trading - Harris
Beyond Technical Analysis - Chande
Trading the Ross Hook - Ross
Japanese Candlestick Charting Techniques - Nison
Influence - Cialdini
The Sedona Method - Dwoskin
Trading is a Business - Ross
The Commitments of Traders Bible - Briese

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 record100 
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Hi Deltason.

of those you read, could you recommend 3 that influenced your trading most?

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 deltason 
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Good question. It's hard for me to pick because I feel that every book I've read on trading has had some effect on my views.

The information contained in the first four books listed below probably have the biggest impact on how I currently see the market. The Williams and Hurst material I've learned primarily through a variety of sources (and I'm still learning). The additional two are must-reads as well, IMO.

Trade Your Way to Financial Freedom - Tharp
Master the Markets - Williams
The Profit Magic of Stock Transaction Timing - Hurst
Trading with the Odds - Kase

Reminisces of a Stock Operator - LeFevre
Market Wizards - Schwager

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 YuvalW 
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Among the ones I have read, I can recommend:
High Probability Trading Strategies - Robert (Bob) Miner.
This is a very good book about swing trading, it describes a full trading plan from entry to exit, it also comes with some video examples on CD.

Currently I read an oldie and I must say that after 6 chapters it is quite surprising:
Trading with DiNapoli Levels: The Practical Application of Fibonacci Analysis to Investment Markets - Joe DiNapoli.

Yuval.

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 TheRumpledOne 
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Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life
by Nassim Nicholas Taleb

The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb

How We Decide
by Jonah Lehrer

Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude
by Mark Douglas

The Disciplined Trader: Developing Winning Attitudes
by Mark Douglas

Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics
by Gary Belsky & Thomas Gilovich

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 cunparis 
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YuvalW View Post
Among the ones I have read, I can recommend:
High Probability Trading Strategies - Robert (Bob) Miner.
This is a very good book about swing trading, it describes a full trading plan from entry to exit, it also comes with some video examples on CD.

Did you try putting Miner's method into practice? I found it to be difficult with all the ratios, retractments, extensions, etc. From what I saw it did see like he had something but it just seemed like so much work. Would probably be easier with his special software.

I did like how he showed examples that didn't work, very few books do that. Seemed like an honest guy.

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 George 
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Did you try putting Miner's method into practice?


cunparis,

If you're into EWT, and you want to count waves, he's definitely the ONE. Difference between Miner and the rest of the Ellioticians is that he's giving you practical examples of how to do it.

/George

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 websouth 
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Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life
by Nassim Nicholas Taleb

The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb

++++++++++++++++++++

I think it important to understand how little we don't understand and how bad we generally are at prediction despite all the "evidence" to the contrary. Take a complex system like weather. An awful lot of technology has been thrown at weather prediction yet there is a huge fall off in accuracy after about 3 days out as there just are too many variables... Local news will still give you a 10 day forecast...it is worthless but it makes you feel better so you can plan your weekend. Then you can express disbelief when it rains on the weekend even though the "forecast" was for sun.... you are getting the comparison with technical indicators predicting price...right?

Anyhow - here is what one reviewer said of Taleb's work. It might encourage you to go read his books.

Sorry for the long post but the thread is about books...

+++++++++++++++++++

« The Paradox of Power and Perception

My New Crush
You know how kids get a crush on someone, how for a time, their every thought and feeling is enlivened by the uncanny existence of the Object of Desire? Reluctantly, I admit this describes my intellectual life. I live for those moments when I discover a new mind, one that illuminates a facet of the world I have not previously been able to bring into focus. I read, I listen, I obsess over my new crush’s thoughts. I have the feeling that integrating them will change my mind, the way a new couch or table refocuses an entire room. I crave that change, and at the same time, I don’t want my new crush to displace the beloved old crushes lounging in the cozy armchairs of my awareness. Meet Nassim Taleb, a thinker who just might clash with the furniture.

Since I discovered him a few days ago, I’ve been downloading, ordering books and listening to podcasts. Go to Taleb’s Web site for links to most everything, and Wikipedia for an overview. Here are all the caveats: this is a supremely confident (I forbear to say arrogant because I like his mind so much), elite personage whose interest in financial markets I don’t really share, whose politics appear to be of the Olympian libertarian variety and whose grasp of the language of mathematics so far exceeds mine it might as well be Greek (or Lebanese, as he is by birth). But I promise you, the underlying ideas are well worth the journey. What Taleb has already given me are much better reasons than my own instincts to do two things I’ve been advocating loud and long: distrust predictions and question theories.

One of his main rhetorical devices is to imagine two realms. Mediocristan is “the province dominated by the mediocre, with few extreme successes or failures. No single observation can meaningfully affect the aggregate. The bell curve is grounded in Mediocristan.” For example, concrete physical realities with limited ranges, like human height or weight, express Mediocristan. If you sample a thousand human beings, plotting their heights, you’ll get a result that looks very much like a bell curve, with most people clustered within a close range, and few that are markedly shorter or taller than that range. Within that sample, the presence of a few little people or basketball players won’t significantly affect the average, the median or the whole. Extremistan is “the province where the total can be conceivably impacted by a single observation.” For example, there is no intrinsic limitation on income. Randomly choose a thousand humans from the poorest nation to the richest: if Bill Gates is included in the mix, he will significantly throw off the average, the median, and the whole. His presence creates a complexity very different from the regularity of Mediocristan. Taleb argues convincingly that we treat far too much of our reality as if it were Mediocristan when in fact much of it often behaves like Extremistan, where there are occasional “black swans” (his name for the unexpected event and the title of his most recent book) among the white. So, for example, out of the many thousands of books, films and recordings released each year, a small number will account for the largest part of sales, and it is not possible to predict with certainty which of the many works released will find black swan-style success (or failure). Indeed, in any endeavor susceptible to notable, unpredictable exceptions, no amount of examining the past will enable us to foretell the future. What’s going on here?

Taleb discusses many factors contributing to our tendency to see our world as Mediocristan. There is the fact that our brains evolved long ago to deal with a world with many fewer variables, much less organized information, and a vastly smaller number of theories to explain them. The more complex any given situation, the larger number of examples you need to understand what is happening there. For instance, sampling the sales of a few dozen published books each year won’t tell you much about the prospects of the thousands of others not sampled. It’s just as likely as not that your sample would include one or more black swans—unexpectedly huge winners or losers—so anything you might conclude based on it would not be generalizable to the rest. Yet it is plain to see that we have a powerful (one might say inbuilt) desire to figure things out, and we like it best when they fall into stable, understandable and predictable patterns. So over and over, we surrender to that desire, generalizing on the basis of too little information and coming up wrong. If I place a few winning bets, I might conclude I am a skilled gambler, even though all that actually happened was a short run of luck. So many Hollywood careers have that trajectory: an early black swan of success is chased by financiers wanting to invest in the next blockbuster, only the second film is a plain old white swan and the one after that an ugly duckling, and all the investors are puzzled as to how they could have been mistaken…until the next black swan comes along.

I love what Taleb has to say about inventions, how almost all of the discoveries that have had tremendous impact on our culture were accidents in the sense that they were discovered while searching for something else. Because of hindsight bias, he says, histories of economic life and scientific discoveries are written with straightforward story lines: someone set out to do something and succeeded, it’s all about intention and design. But in truth, “most of what people were looking for, they did not find. Most of what they found they were not looking for.” Penicillin was just some mold inhibiting the growth of another lab culture; lasers at first had no application but were thought to be useful as a form of radar; the Internet was conceived as a military network; and despite massive National Cancer Institute-funded cancer research, the most potent treatment—chemotherapy—was discovered as a side-effect of mustard gas in warfare (people who were exposed to it had very low white blood cell counts). Look at today’s biggest medical moneymakers: Viagra was devised to treat heart disease and high blood pressure. It’s interesting to think about this in career or relationship terms, realms full of complex human variables. Taleb points out that tons of books and gurus are based on asking the successful to explain how they got there. Typically, big winners in both business and love say it took good ideas and lots of hard work. But these are just stories people generate out of the need to explain, because many big losers also had good ideas and worked their butts off, with the opposite result. This is so commonsensical that it ought to be obvious, but as Taleb says, we suffer so badly from the “confirmation error” (looking for information to confirm a foregone conclusion or belief system), we are thrilled to the point of stupidity when someone publishes a book or otherwise propounds an idea that confirms our hunches. Guilty as charged. There’s no denying that Taleb confirms some of my pet observations. For example, isn’t the following entry from his glossary delicious?

Empty-suit problem (or “expert problem”): Some professionals have no differential abilities from the rest of the population, but for some reason, and against their empirical records, are believed to be experts: clinical psychologists, academic economists, risk “experts,” statisticians, political analysts, financial “experts,” military analysts, CEOs, et cetera. They dress up their expertise in beautiful language, jargon, mathematics, and often wear expensive suits.

Many such experts have made their reputations by giving retrospective explanations for events, often delivered in the type of neat theoretical package that satisfies the desire for a story confirming our beliefs or reinforcing our sense of security. But being able to make up a good story after the fact is meaningless; the only thing that can count as true understanding, that can truly test a theory, is accurate prediction, and there we have fallen far short of success. Mostly, I think, our theorizing is useless at best, dangerous at worst. How many times have you had the following experience? You become aware of two different physical symptoms at the same time, say a headache and a rash. In the privacy of your own head, you develop a hypothesis that links them: the same naughty bacterium is nibbling at your brain and your epidermis. Then you go to the doctor and are surprised (and relieved) to learn the rash is poison oak and the headache too much wine.

Just so in the news. Because we love things to make sense, because we are always on the lookout for correlations (and willing to settle for cleverly packaged coincidences in their place), any study that seems to satisfy these desires gets column-inches, but there’s no room to print the fact that a dozen other teams of researchers looked at the same phenomena without turning up a meaningful correlation. For every scientific experiment or medical study that produces a startling (if short-lived) conclusion that feeds our desire for orderly sense, there are countless studies that generate inconclusive or negative results.
Lately, I have been thinking about a problem that Taleb alludes to in even the bit of his thinking I’ve already read and heard. We are surrounded by a gargantuan news- and information-generating apparatus. Its appetite is enormous, as it must poop out vast quantities of airtime and newsprint every day. Consequently, we have story after story about results that turn out to be irreproducible (every week bringing its news flash of soon-to-be supplanted miracle cures and diets, instance) and a glut of theories as to why the economy works (or doesn’t), how to reduce crime, how to improve education, and so on. We broadcast a whole flock of black swans every evening—uncanny accidents, rare occurrences, terrible risks gone wrong—which normalizes them in our minds, so that our estimation of their likelihood is amazingly skewed. From what I can see, this glut is making us less and less able to cope. Taleb’s sense of our problem is that we do not know how much we don’t know. He has a challenging task in drawing useful advice out of uncertainty. I’m looking forward to reading his books, but in the meantime, I am entertaining a few ideas his work seems to suggest:

Since we can’t control unpredictable events, we should accept uncertainty and seek to maximize our exposure to serendipity, as by putting ourselves in the way of new ideas. Since there is such danger in accepting conclusions based on too little information simply because they confirm our beliefs, we should try to remain aware in the present of what we are doing, paying attention to what actually happens and refraining as far as possible from imposing theories on our experience. We should recognize our poor record as a species in predicting the future, that we are much better at doing than knowing. Some things are more predictable than others: we are safe enough in expecting tomorrow’s sunrise to plan on breakfast. We can start noticing which situations are most susceptible to black swans, and when we encounter them, remember how little we truly know so our ignorance doesn’t lead us around by the nose.

I hear my old crushes—Paul Goodman, Paulo Freire, Isaiah Berlin—grumbling a little at having to move their armchairs back to make room for this upstart. But really, he fits right in. Goodman wrote eloquently about the slavishness expressed in our devotion to experts; Berlin rejected most theorizing about human beings as “grotesque,” and Freire made us understand the disabling effects of allowing certain ideas about ourselves to dominate our minds. In truth, they seem very happy to meet Nassim Taleb, another uncolonized mind. And so am I.

+++++++++++++++++

interesting, huh?

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 websouth 
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I thought Triana's book wasn't that good but the forward by Taleb is worth reading. The title to me is ingenius - LECTURING BIRDS HOW TO FLY kinda sums up a lot of things especially if you feel central planning is a failure and you could live your life just fine without a central gov't somewhere forcing you to wear a seatbelt or buy a license to fish.... but you are free right...? Taleb has fun being condesending. Take a look at his point of view and see if it helps your trading.


HISTORY WRITTEN BY THE LOSERS

FOREWORD TO PABLO TRIANA’S LECTURING BIRDS
HOW TO FLY
by
NASSIM NICHOLAS TALEB

I
January 2009: I am at the World Economic Forum in Davos, looking at the sorry crowd of businessmen, journalists, and bankers. There are also a few finance academics. Many practitioners look like they have just fallen off a bicycle, still confused about how to behave. All these years, they had not realized that their models underestimated the risks of high-impact rare events, allowing the buildup of huge positions that are in the process of destroying free markets, capitalism, and finance. Instead of making probabilistic assessments about Black Swans, they should have insured some kind of robustness to them. I feel sorry for the crowd, as I am certain that most of these people will not be here next year—there is effectively a mechanism called evolution, harsh to humans. But the academics among them, equally wrong about the models (in fact, they were the ones feeding bankers with bad models), wrong about the world, wrong about the very notion of knowledge, wrong about everything, will be back next year—that I guarantee. Unless they are caught seducing graduate assistants, their jobs are safe. Nobody ever lost his tenure in social science for being wrong (the opposite may be true). There is no such thing as evolution in academic settings.

II
The biggest myth I’ve encountered in my life is as follows: that the road from practical know-how to theoretical knowledge is reversible—in other words, that theoretical knowledge can lead to practical applications, just as practical applications can lead to theoretical knowledge. After all, this is the reason we have schools, universities, professors, research centers, homework, exams, essays, dissertations, and the strange brand of individuals called “economists.” Yet the strange thing is that it is very hard to realize that knowledge cannot travel equally in both directions. It flows better from practice to theory—but to understand it you have nontheoretical knowledge. And people who have nontheoretical knowledge don’t think of these things. Indeed, if knowledge flowed equally in both directions, then theory without experience should be equivalent to experience without theory—which is not the case.

The myth may have all started in a Plato dialogue, Euthyphro, in which Socrates heckled a fellow who claimed to be pious but could not define piety. The flustered fellow, bullied by Socrates, never replied (according to Plato) that babies drink their mother’s milk without being able to define what drinking milk is, or love their mother without being to explain what love or mother mean. This led to the thinking in the primacy and overblown importance of what can be called propositional knowledge—with so many side effects. Alas, it took me a long time to disbelieve in propositional knowledge. Not only do you need to be a practitioner to realize it, but you need to ignore cultural opinions and use the raw, plain, easily obtainable, and somewhat shockingly potent evidence. And if you consider the effect for a moment, you will realize that it is more consequential than you thought.

Let me explain how the problem started screaming at me, around 1998. I was then sitting in a Chicago restaurant with a finance academic, though a true, thoughtful gentleman. He was advising one of the local exchanges on new products and wanted my opinion on the introduction of knock-out options—which I had covered in some detail in my first book, Dynamic Hedging. He recognized that the demand for these options was great, but wondered “how traders could handle these exotics if they do not understand the Girsanov theorem.” The Girsanov theorem is about a change of probability measure, something mathematically complicated that was needed to derive a closed-form formula for the options—though in the well-behaved Gaussian world. But you don’t need it to understand anything about exotic options. For a minute I wondered if I was living on another planet or if the gentleman’s PhD led to his strange loss of common sense—or if people without practical sense usually manage to get the energy to acquire a PhD in financial economics. Nobody worries that a child ignorant of the various theorems of thermodynamics and incapable of solving an equation of motion would be unable to ride a bicycle. Yet, why is it that we made the Euthyphro mistake with our understanding of quantitative products in the markets? Why should traders responding to supply and demand, little more, competing to make a buck, do the Girsanov theorem, any more than a trader of pistachios in the Souk of Damascus needs to solve general equilibrium equations to set the price of his product?

Then I realized that there has to be a problem with education—any form of formal education. I collected enough evidence that once you get a theory in your head, you can no longer understand how people can operate without it. And you look at practitioners, lecture them on how to do their business, and live under the illusion that they owe you their lives. Without your theories and your learning they will never go anywhere. All that can be tested. How? We can look at historical evidence. It is there, in front of our eyes, staring at us.

III
Let us take what is known as the Black-Scholes option pricing formula. Every person who had the misfortune of taking a finance class is under the illusion that the Black-Scholes-Merton formula is a gift from the three individuals who offered it to mankind and need to be rewarded for their great deed because we otherwise would not have the technology to understand these items. Without it we cannot price options. True?

Well, Espen Haug and I scratched the surface looking for the real evidence going back to the late nineteenth century.1 And we figured out that traders did much, much better pricing options before the option formulas were invented. The solid arbitrages were maintained (put-call parity, no negative butterfly, etc.). Traders, thanks to tinkering and evolutionary pressures, fumbled their way into a heuristic option pricing formula: Those who liked to short out-of-the-money options blew up in time; those who bought them survived. Traders knew what the heuristic “delta” was—about half for an at-the-money option, progressively less for an out-of-the-money option. Indeed, in our paper we interviewed veterans who confirmed that option traders in Chicago priced “off the butterfly,” with “no sheets” (i.e., no pricing formula). I myself was a pit trader in Chicago in the early 1990s and saw that prominent option traders priced options without formulas. Coincidentally, our paper introduced the metaphor: “lecturing birds how to fly.” Traders were robust to the Black Swans, these sudden events that are the scourge of option traders. In that respect, Black-Scholes-Merton was a dangerous regression. It was made only to accommodate the financial economics establishment and portfolio theory by showing how dynamic hedging removed the price of risk—a Platonic thought experiment that was beyond the unnecessary, as it proved toxic. The exact formula they used—narrowing down the distribution to the Gaussian—had been around in its exact form since Ed Thorpe and in a different, no less realistic form since Louis Bachelier, which could accommodate any probability distribution. Various accounts of the history of financial theory ignored the point: It is not just
that history is written by the winners; it is written by the losers—those losers with access to the printing press, namely finance professors. I noted while reading a book by Mark Rubinstein how he stuck the names of finance professors on products we practitioners had been trading and perfecting at least a decade earlier. History written by the losers? A prime example is how the historian managed to downplay his “portfolio insurance,” a method that failed miserably in the crash of 1987.
History is truly written by losers with time on their hands and a protected academic position. In the greatest irony, the historical account of techné in derivatives pricing that Haug and I wrote was submitted in response to an invitation by an encyclopedia of quantitative finance. The editor of the historical section, proceeded to rewrite our story to reverse its message and glorify the epistemé crowd.
I was a trader and risk manager for almost 20 years (before experiencing battle fatigue). There is no way my and my colleagues’ accumulated knowledge of market risks can be passed on to the next generation. Business schools block the transmission of our practical know-how and empirical tricks, and the knowledge dies with us. We learn from crisis to crisis that modern financial theory has the empirical and scientific validity of astrology (without the aesthetics); yet the lessons are forgotten and ignored in what is taught to 150,000 business school students worldwide.
Note that what academics tend to call “practitioners” are often PhD-laden academics who go to practice and fall prey to the Euthyphro problem. This is why Pablo Triana was capable of writing this book: Like a minority of people (Espen Haug, myself), he did not go from theory to practice, but did the reverse.

IV
There is another problem with current researchers in financial economics: They are self-serving—perhaps no more, but certainly no less than other professions. Just as one of the problems with governments is that government officials have an objective function that may deviate from that of the general public, it is a myth, a great myth, that academics are there for the truth. When you hear a tobacco company talk about “health,” you smirk—yet when you hear a finance professor talk about “evidence” and “risk,” you don’t. Alas, academics claim to look for evidence. But they seem to select what evidence they need for their purpose. I have shown that value at risk (VaR) does not work, with mathematical and empirical evidence (20 million pieces of data). But the evidence was ignored. In at least one instance, it was derided. Mandelbrot was completely ignored and his work was hidden from us. Had I shown that it worked, or had other academics produced evidence that fit their point, it would have been called “evidence” and published.
Traditionally charlatans have hidden themselves behind garb, institutions, and language. Now add fancy mathematics. Robert Merton’s book Continuous Time Finance contains 339 mentions of the word theorem (or equivalent). An average physics book of the same length has 25 such mentions. Yet, while economic models, it has been shown, work hardly better than random guesses or the intuition of cab drivers, physics can predict a wide range of phenomena with tenth-of-a-decimal precision. They make you believe that their detractors are quacks by going ad hominem and skirting the arguments altogether. For a strange reason, I saw more solid critical thinking on the part of practitioners than academics. One common argument I’ve heard trying to extinguish my criticism of VaR in The Black Swan: “This is a popular book,” implying that its arguments lack rigor. Now if all arguments lacking in rigor are popular, it does not follow that all popular arguments are lacking in rigor. You rarely find people outside academia making such a mistake. The cost of modelization is the loss of open-mindedness, but in some areas—say, engineering—this can be tolerated owing to the low-error quality of the models and their tracking ability.
My point is not that current academics are bad, but that there is a tendency by nonpractitioners to idealize Platonism and fall prey to the Euthyphro problem – not recognize that knowledge in society aggregates through action (a point made by Hayek but that did not sink in for the economics profession). While Pablo Triana is perhaps the very first person I’ve met who got the point, I highly disagree with his endorsement of the sterile critiques by nonpractitioners such as Derman and others, as their conscience-clearing halfwayness causes more harm than good. I hold that anything that does not start with the basis that techné (knowhow) is superior to epistémé (know what), especially in complex systems, is highly suspicious.

V
One warning before concluding. You are often told, “This is just a model; it is just an aid; you do not need to use it.” I was often told that value at risk was just one piece of information among plenty—so these people providing it could cause no harm. True?

Do not put cigarettes in front of an addict—even if you give him a warning. I hold that information is not neutral. Never give a (fallible) human sterile information. He will not ignore it. These models led to an increase of risk in society, period. The providers are responsible.

VI
What should we do?
Do not waste time trying to convince academics. They will tell you, “Give me a better model or shut up,” not realizing that giving someone no map is much, much better than giving him a wrong map. Academia does not like negative advice (what not to do). Just put them to shame. Ignore them. Put them down. Discredit business schools. Ask for cuts in funding. We can no longer afford to compromise. Do what some friends have done: resign from the various associations, such as the International Association of Financial Engineers and the CFA Institute. These institutions were promoting wrong models and will not repent naturally, no more than the tobacco industry would fight smoking in public places. You need to shame members, humiliate them. Make fun of these charlatans.

VII
I thank Pablo Triana for his wonderful lucidity, courage, and dedication in the service of the truth. This is the very first book that looks at the side effects of models, at the harm caused by models, and fearlessly points fingers where fingers should be pointed. I am convinced that the reader will come out of reading it much wiser, and that the publication of this book will make society a better, safer, and more risk-conscious place.

—NASSIM NICHOLAS TALEB

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 sefstrat 
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Thanks for that websouth, the intro to 'Lecturing Birds' was interesting.

I must admit I am guilty of what Tasseb mentions, having a negative bias against 'The Black Swan Effect' without having read it solely because it is a popular book. Based on what I read here I might have to give it a read.

I definitely agree with him on the idiocy of the academic finance community at large. I read a large number of academic publications and many of the academic finance monographs literally make me laugh out loud because they are so disconnected from reality.

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 cunparis 
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I've had Taleb's books on my reading list for a long time, I finally started "Fooled by randomness" and I'm 1/3 way through. It's fantastic. I love it. I'm discovering that I had no idea what I was doing and that all my gains were luck and my losses due to overconfidence. Quite shocking really.

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 Big Mike 
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I'm about to buy two more books, and was wondering if anyone has read them and wants to share feedback...

The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist, by by Brett N. Steenbarger



and...

Super Trader: Make Consistent Profits in Good and Bad Markets, by Van Tharp



Feedback before I pull the trigger on these two? My thinking is to expand my understanding of the psychological impact and better control it, since I think mastering oneself is really the key to trading (book one), and then to also reach more objective decisions regarding money and risk management, position sizing, etc (book two).

Mike

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 goldilocks 
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I have found some specifi to trading books interesting, but to respond to the mediocre/excellent topic, I have a different approach:

Transformation: Understanding the Three Levels of Masculine Consciousness by Robert Johnson
(borrowing someone else's review on Amazon): Johnson is a Jungian analyst who writes about myths and how they can tell us a lot about our life experiences and why we do what we do and why things happen to us. In this (short) book (105 written pages) he writes about the three levels of consciousness of men and gives a literary example of each. Don Quixote is Two-Dimensional Man (or simple man), Hamlet is Three-Dimensional Man (or complex man), and Faust is Four-Dimensional Man (or enlightened man). Johnson describes how men go through these stages, but sometimes become stuck at complex man because they have become so educated that they cannot give up their knowledge and return to the simplicity that can be seen in enlightened man. ** as it relates to trading, not being able to pull the trigger....

I also find interesting self sabotage as it relates to success... which includes how maybe guilt or low esteem or trauma promotes a rerun through the most intense feelings one has experienced in effort to resolve them. This implies a need to address mental tapes/ self talk. Any books on meditation might help. Or directly, replacing one replayed belief with another.

Also, I find the use of music, specifically baroque has been suggested to activate holistic thinking. With most of us taught to think with the left brain, it is when one can somehow tap into using a different part of the brain. http://www.youtube.com/watch?v=d8pFIU65B_g and anytime you get out of a rut of thinking in the same way, you have the possibility and potential to create, do and think something new.

Also, it is suggested that during the Renaissance, the amazing new thought, artistic excellence and the brilliance of some during that time... that these people were friends. Controversially, they were Freemasons, etc. But what a lot of people don't know is that it is questioned that maybe they used yoga as one route to holistic thinking, not to mention the association with like-minded, creative minds. Yoga balances the use of the body, including the mind and increases the intuition as one benefit. (This wouldn't be a book recommendation but rather an activity..)

Lastly, I recommend Malcolm Gladwell's books, but most specifically, his latest one, "The Outliers" -- In this book I'm interested in people who are outliers—in men and women who, for one reason or another, are so accomplished and so extraordinary and so outside of ordinary experience that they are as puzzling to the rest of us as a cold day in August.
http://www.gladwell.com/outliers/index.html






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 cunparis 
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Mike -

Dr. Steenbarger is very well regarded, I haven't read his books but I've read some of his blogs and I like him. I plan on reading his books.

I totally quit reading any books on any trading method. It seems they all either don't work or require expensive software (and probably still don't work!). So I'm now focusing on the money management and psychology part.

I just posted about a blog I'm reading, I originally put it here but since this is a book thread I thought I'd create a new topic. I'm hoping others will read it and want to discuss it. So far, from what I've read, it's far better than other trading psychology books that I've seen.


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 goldilocks 
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cunparis View Post
Mike -

Dr. Steenbarger is very well regarded, I haven't read his books but I've read some of his blogs and I like him. I plan on reading his books.

I totally quit reading any books on any trading method. It seems they all either don't work or require expensive software (and probably still don't work!). So I'm now focusing on the money management and psychology part.

I just posted about a blog I'm reading, I originally put it here but since this is a book thread I thought I'd create a new topic. I'm hoping others will read it and want to discuss it. So far, from what I've read, it's far better than other trading psychology books that I've seen.


I took a look at this blog: it looks interesting.

I don't find trader books very helpful right now either. I am at a different place in my knowledge base than you are, clearly, tho. I find I'm battling discipline, fear and emotion more than anything. I trade very successfully in SIM mode, but the moment I switch over, it's a new ballgame. Getting better, but maybe this blog will help. thanks.

Also plan to check out WH's emotional clearing thread... thanks to him, too.

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I trade very successfully in SIM mode, but the moment I switch over, it's a new ballgame. Getting better, but maybe this blog will help. thanks.

I went through this stage and unfortunately it took me losing the majority of my account before I broke out of it. Just like an addict as to hit bottom, it seems to be the same with trading.

In my case with sim I tend to let winners run and with real money I tend to cut them short. I'm currently working on a new method and I'm doing some sim and some real. I made a rule for this method:

Rule: Once the order is placed, I cannot touch the DOM. either my target is hit or I'm stopped out.

So yesterday I had 2 successful trades and a breakeven. This is on sim. So in my 4th trade the market was quite choppy over the past 2 hours so I thought I'd exit at breakeven (it had went in my favor and was pulling back). So I got out. About 15-20 minutes later it would have hit my target. So I added another rule:

Rule: Do NOT violate under any circumstances the previous rule.

In the blog I linked to, you'll find repetition is very important. You have to have total confidence in your method to trade without stress. I'm building that confidence in three ways:

- manually backtesting & using market replay to test prior months
- trade on sim until I'm very confident with it
- review every trading day and identify mistakes and missed trades

This is pretty much what I do with any new method. I find once I do that I have the confidence to follow the rules. Most of the time.

I hope you found that useful, if you'd like to discuss it further with specific examples (mine & yours) we can start a new thread.

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I went through this stage and unfortunately it took me losing the majority of my account before I broke out of it. Just like an addict as to hit bottom, it seems to be the same with trading.

I hope you found that useful, if you'd like to discuss it further with specific examples (mine & yours) we can start a new thread.

Cunparis,
I appreciate your response and willingness to start a thread on this... I have a lot going on thru the rest of the month and won't be consistently trading. So, maybe in the new year, if you're still open to the idea. Thanks! I'll get back to you, if so.

LOL. yes. I can relate to the losing the account statement. I apparently haven't hit bottom yet. Thanks again.

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cunparis View Post
Mike -

Dr. Steenbarger is very well regarded, I haven't read his books but I've read some of his blogs and I like him. I plan on reading his books.

I totally quit reading any books on any trading method. It seems they all either don't work or require expensive software (and probably still don't work!). So I'm now focusing on the money management and psychology part.

I bought his new book, I am creating a thread on it.

I agree with not benefiting too much from 'trading method' books. It's all about psychology and money management. Yet, it's the least popular forum here. But hey, 95% of people here lose money, so makes sense in a way.

Mike

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 cunparis 
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I bought his new book, I am creating a thread on it.

I agree with not benefiting too much from 'trading method' books. It's all about psychology and money management. Yet, it's the least popular forum here. But hey, 95% of people here lose money, so makes sense in a way.

Mike

I think it makes sense because most people start looking for an edge. And unfortunately, during this search for an edge, they may:

- develop bad habits that are very hard to change
- think they have an edge when they do not
- find an edge that is only temporary

In my case it was all of the above. This is why it took me so long to straighten myself out.

I remember the first "technique" I studied, the teacher said not to trade it, even on sim. He said to just study it and watch it for months. Said it could even take a year. I thought he was off his rocker and I started simming it. I didn't have the edge yet, and in simming it I did stupid things that were sometimes rewarded by the market with a win. And that started my long trip down the wrong road.

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 wh 
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But hey, 95% of people here lose money, so makes sense in a way.



Best regards and nice book reading, transform yourself to a master trader.

Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 Big Mike 
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Best regards and nice book reading, transform yourself to a master trader.

Thanks Arnie, I will add these to my Kindle 'save for later' list.

Mike

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Big Mike View Post
Thanks Arnie, I will add these to my Kindle 'save for later' list.

Mike

Well, I got the sedona method, I also was given some of the audio cd's as a gift from George. But the Core Transformation book is not available on Kindle yet, I sent my request for the publisher to add it. So I probably won't read that one.

There really should be an entire thread devoted solely to The Sedona Method here on the forum, don't you think? I'm not qualified to start it just yet, but some of you guys should.

Mike

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  #42 (permalink)
 wh 
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here another book from me:


in my opinion the best trading book after a german book from voigt

Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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  #43 (permalink)
 Big Mike 
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I've just purchased this book:



Trading Rules That Work: The 28 Lessons Every Trader Must Master, by Jason Alan Jankovsky

So far I like his writing style, and I needed a second "active" book so I can alternate back and forth with the other one I'm reading actively, Brett Steenbarger's: Daily Trading Coach.

Mike

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 Big Mike 
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wh View Post
here another book from me:


in my opinion the best trading book after a german book from voigt

I looked into this one, downloaded and read the sample content. It seems to be all about chart patterns and pullbacks, retracements, etc -- which is great, and rather obvious from the title -- but I've grown rather tired with such books telling me where to enter or exit, and am trying my hand at the psychological aspects rather than the exact trading method.

Mike

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  #45 (permalink)
 rocheleau 
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The Turtle Traders is a must to understand the emotional side of trend trading

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 wh 
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Big Mike View Post
I looked into this one, downloaded and read the sample content. It seems to be all about chart patterns and pullbacks, retracements, etc -- which is great, and rather obvious from the title -- but I've grown rather tired with such books telling me where to enter or exit, and am trying my hand at the psychological aspects rather than the exact trading method.

Mike

all is in this book, mike.

Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 cunparis 
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This was one of the earlier trading books I read, as with most, I think I was not ready for it and it's good to go back and read the best ones a second time. Thanks for reminding me of this one.

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 fiki 
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Probably one of the best books I´ve read is is Carl Futias "The Art of Contrarian Trading".

Carl Futia is a blogger and life long trader/investor. I his book he describes his simple setups for beating the market. Nothing usefull in my style of trading but the thing that made it one of my best book is that I learned a lot about myself. He uses media alot in deciding if ist bull or bear. And he describes the influence of media and information and how we´re succered into following it.

Check out the reviews on the book: Amazon.com: Customer Reviews: The Art of Contrarian Trading: How to Profit from Crowd Behavior in the Financial Markets (Wiley Trading)

9 of 9 gave him 5 stars and then someone who didnt read the book gave him 1 star just because he couldnt belive that the other comments were real...

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 Big Mike 
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Probably one of the best books I´ve read is is Carl Futias "The Art of Contrarian Trading".

Cool, I found this book last week and have it in my queue, it is near the top of my to-read list after I finish my current two books.

Mike

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joyginy
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I have a link of rapid share for sadona method it is audiocan i post it here

Hale Dwoskin - The Sedona Method® Audio Course



The Sedona Method is the fastest, easiest, most powerful self-improvement technique available today.

* Achieve financial abundance
* Improve all your relationships
* Be radiantly healthy
* Release all your anxieties & fears
* Eliminate your stress
* Beyond anger management
* The natural solution to depression
* Gain emotional wellness & intelligence
* Have boundless energy & sleep soundly
* Free yourself from emotional trauma like grief,
abuse, low self esteem,
* caretaker syndrome, codependency & more
* Lose weight, quit smoking, stop gambling & drop other addictions & bad habits
* Find lasting inner peace, joy & love
* Accelerate your progress with the most powerful self improvement technique on the planet

These are just some of the many benefits you'll receive from using the Sedona Method.

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  #51 (permalink)
 fiki 
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Hope u find it as interesting as I. Just so u know there are no charts in the book. Futias brilliance is in the psychological interpretation of the market sentiment. The guy has been in the business for a long time and does really well on the trades he posts live on his blog. All he uses is newspaper covers, some trendlines and volume patterns. After reading it I now keep my own little media diary to remind me to keep my cool when it starts to rock a lot.

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  #52 (permalink)
 cunparis 
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fiki View Post
Hope u find it as interesting as I. Just so u know there are no charts in the book. Futias brilliance is in the psychological interpretation of the market sentiment. The guy has been in the business for a long time and does really well on the trades he posts live on his blog. All he uses is newspaper covers, some trendlines and volume patterns. After reading it I now keep my own little media diary to remind me to keep my cool when it starts to rock a lot.

2 months ago I stopped all news. I did it mainly to stop financial news. CNBC, CNN, and blogs. But even going to CNN for regular news I'd accidently see things about the economy. So I stopped, cold turkey. Yes I'm out of touch with current affairs but I found it didn't make one bit of difference in my life.

And oddly enough, my swing trading improved dramatically. I'm near 100% win rate for the past 2 months.

So I'm curious how this book would apply to my situation? If it uses the media then I think I prefer to stay in the blind. I was always letting myself get influenced. Even if I tried to take a contrarian point of view.

I even subscribed to sentimentrader thinking that would help me see through the sentiment and fade the crowd. It didn't.

Now just trading price works much better. I didn't know why the market tanked, all I knew is I was short. And when coworkers talked about Dubai defaulting on loans it made sense why the market tanked. But the warning signs where there to those who studied the price action closely.

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  #53 (permalink)
 fiki 
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cunparis, i actually dont follow media like cnbc and such. all I do is look at a economic calender before trading so I dont trade infront of any numbers. but I never look to see if the numbers were good. i dont eighter follow blogs on projections. thats all noise to me and it confuses me.

the media diary is just a piece of the book. futia doesnt eighter follow finans media but only maistream like new york times and some other. and he only pays attentions to big cover stories. his reasoning is that when it hits mainstream its time to do the opposite.

offcourse if you only scalp then the book maybe isn´t interesting. it´s not tecnical. I view it as a good book on market understanding. most of the books I like are eigher for inspiration, market or self understanding.

this one helped me deal with fear. like dubai was a front story in sweden. that morning when I saw the cover story I actually bought the swedish omx and got a nice profit while people at work were talking about the consequenses. the diary reminds me that the news are just b-s. my diary doesnt have that much articles. Its not often mainstream media is interested in the market.

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  #54 (permalink)
 FredyMegaG 
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I've been reading Seth Freedman's "Binge Trading".
It kind of reminds me of Reminiscences of a stock operator.

It a story about his personal life, how he entered the trading world, relentless trading, fortune making, spending, drugs, cash, etc.

It doesnt teach you a lot about entries and exits (or any technical analysis for that matter), but it kind of gives you an insight about what happens at trading, and how he felt about it, to the point that he left the game...

Its an easy reading, and still you get an idea of the rotten side of trading.

Its relatively smal, ie under 200 pages, so i recommend it if you'd like to read trading-related stories.

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 cclsys 
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Sun Tsu The Art of War by the Denma Translation Group and their follow-up
The Rules of Victory - Strategies from the Art of War by Gimian and Boyce which goes deeper into how to apply the text in everyday life situations. Both written in modern English with the view to making the underlying material fresh and available. Highly applicable to traders as well as anyone in a 'leadership' role which basically means, acc. to their definition, anyone taking responsibility for their lives and actions.

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 fiki 
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Now Sun Tsu´s The Art of War is my favorit book. I´ve read this so many times I lost count . Even read different translations not to miss something. Like cclsys wrote, great for traders but foremost for everyday life situation. It´s appicable in all situations that resambles a conflict. It´s just a book about strategy and beeing clever as a fox

Amazing, this is someones thoughts 2000 years ago...

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 hondo69 
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I've enjoyed Zen and the Art of Poker as it very much applies to trading as well.

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 isarhodes 
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Hi there all,

I think the most influential book i have ever read (can't remember the times anymore), is
"The Undeclared secrets that drive the stock market" plus its updates,
Its a true eye-opener in realising how the markets move.

Sincerely,

Isa

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 Big Mike 
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Big Mike View Post
I've just purchased this book:



Trading Rules That Work: The 28 Lessons Every Trader Must Master, by Jason Alan Jankovsky

So far I like his writing style, and I needed a second "active" book so I can alternate back and forth with the other one I'm reading actively, Brett Steenbarger's: Daily Trading Coach.

Mike

Unfortunately, once I made it about half way through I was really not pleased with the book any longer. I got a refund.

Mike

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 hotdog 
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Try Joe Ross books. He's a real super trader and shows how to read pure price action. Trading by the Minute and Trading by the Book are both excellent. I also found Japaneese Candlestick Charting Techniques to be very helpful as well as anything by Larry Conners and Toby Crabel (opening range breakout). Crabel has an incredible amount of stats on ORB's that you could explore for years.

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 cunparis 
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wh View Post

I started listening to the audio book. I gave up after bout 30 minutes. It seems too touchey feely. letting go. Maybe it's cause I've learned to do this on my own but I don't feel like I have anything to let go of.

in the first exercise he said to think of a problem or something we want to improve. so I thought "be more patient with my 4 year old" (she's a real terror). So then he askes if we're ready to welcome this thought. and then can we release it. I didn't understand any of it.

I guess if someone was really stressed or anxious bout trading maybe this book could help. but also if the person traded simulator for 6 months I think that would cure it too.

Anyone else tried it? I remember trying to listen to dr. phil's book. I thought his show was funny. his book must be targeted at real losers. I couldn't believe the stuff in the book. I didn't even finish it and that was when I stopped listening to most of that stuff (Wayne Dyer is another one). I prefer stuff that isn't targeted at people with serious problems.

BTW no one recommended "Think and Grow Rich". That book is truly excellent and aimed at achievers and not losers.

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 fiki 
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Beat the Forex Dealer by Agustin Silvani is the best book I´ve read on forex. Since everything is connected even equity traders might find it interesting. It´s easy to read and offers very good insights on how the spot market works.

Agustin Silvani is for forex what Tom Williams is for volume. I love reading those books that show how shady the market really is. Trading forex whothout this book is like jumping out of an aeroplane with no parachute .

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Binkyroo
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Mind Over Markets
Markets in Profile -- both by James Dalton

Both books focus on using volume / value to create a picture of how the psychology of the auction process is unfolding. Some of the concepts may seem overly simple, but it's a simplicity that is often overlooked. Instead of giving strategies for specific markets, they try to show how all markets function by the same basic auction principles, and how the psychology of the auction can be used to predict possible outcomes.

Also, all three of Dr. Steenbarger's books. If you read his blog, some of it is repetitive, but he presents so many diverse, yet still relevant concepts that it would take years to absorb and implement all the great ideas he has.

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 George 
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cunparis View Post
I started listening to the audio book. I gave up after bout 30 minutes. It seems too touchey feely. letting go. Maybe it's cause I've learned to do this on my own but I don't feel like I have anything to let go of.

in the first exercise he said to think of a problem or something we want to improve. so I thought "be more patient with my 4 year old" (she's a real terror). So then he askes if we're ready to welcome this thought. and then can we release it. I didn't understand any of it.

I guess if someone was really stressed or anxious bout trading maybe this book could help. but also if the person traded simulator for 6 months I think that would cure it too.

Anyone else tried it? I remember trying to listen to dr. phil's book. I thought his show was funny. his book must be targeted at real losers. I couldn't believe the stuff in the book. I didn't even finish it and that was when I stopped listening to most of that stuff (Wayne Dyer is another one). I prefer stuff that isn't targeted at people with serious problems.

BTW no one recommended "Think and Grow Rich". That book is truly excellent and aimed at achievers and not losers.


Well, I guess it's not for everyone. Anyhow in order to explain the process. It's rather simple. We have a lot of programs running in the background. Meaning that they run constantly in your mind. And they're the result of all your accumulation of experiences, feelings and information since you were born. The part of the mind containing the emotions is the subconscious mind. That's why they're talking about letting go, which means letting go of emotions.

But in order to be able to get rid of something you have to have something to get rid of first. That's the part where you more or less are asked to face it. Most people don't succeed with that because they're using their conscious mind. And that part does not contain any emotions only a lot of rational thinking.

So simply put. When he asks to welcome the emotion. You're supposed to welcome the feeling when your 4 year old is the real terror, and then you'll be having an emotion to let go of. If you turn the process around, and go on visualising that the situation has already improved, then it's more difficult to let go of that, right?

Using Sedona with trading can be very beneficial, in order to get rid of all the emotional charge that any trading outcome can create. After all we all need to be in an erased mode, after every executed trade!

We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now.
Past performance is not indicative of future results.
/George
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 wh 
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Last book i will read about trading, but i think it can be importent for my harmonic trading ...


Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 sam028 
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wh View Post
Last book i will read about trading, but i think it can be important for my harmonic trading ...


The screenshot is too small, we can't read the title, "the definitive guide to formatting ???".
Formatting what ?

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 darthtrader3.6 
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BidAskPimp View Post

I actually think this is the most overrated book in trading..Its long with alot of words but says alot of nothing. Market Microstructure Theory and Empirical Market Microstructure are better taken togather, but microstructure isn't that hard to figure out without a book if you just google high frequency trading stuff.
I think Mind over Markets was one of the few trading books I bought that was more than worth it, other than impressing chicks with your trading library book collection. Victor Niederhoffer's stuff I think is good as far as viewing trading in the wider area of speculation in general.

I would highly recommend Ralph Vince's Handbook of Portfolio Mathematics...Extremely deep stuff..highly theoretic as optimal F doesn't make that much sense in alot of cases but food for thought non the less.

Another gem is the later chapters in The Mathematics Of Poker on bankroll management by quant trader Bill Chen.

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  #68 (permalink)
 wh 
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sam028 View Post
The screenshot is too small, we can't read the title, "the definitive guide to formatting ???".
Formatting what ?

Here the title: The Definitive Guide to Forecasting Using W.D. Gann's Square of Nine

Forecast = Target . . .

Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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Andrew
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first really great thanks to Big Mike for that thread and of course for the whole forum.

secondly, I have question which may be somebody can help me answer.
I've interested to read just some simple books like Market Wizards or better like Pit Bull by Martin Shwartz
anyone can recommend something similar ?

Thanks in advance.

Krgds,
Andrew

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  #70 (permalink)
sjrider
utah
 
 
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I have only read two books about trading.
Reminiscences of a stock operator
Master the markets
I would and have recommended these two books to anyone. After reading some of the reviews I will probably read some more.

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  #71 (permalink)
 websouth 
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I like the Taleb stuff. Here's a bunch.
Edge Search Results


and here's one to start with.
THE OPIATES OF THE MIDDLE CLASSES
We humans are naturally gullible — disbelieving requires an extraordinary expenditure of energy. It is a limited resource. I suggest ranking the skepticism by its consequences on our lives....
Edge: THE OPIATES OF THE MIDDLE CLASSES by Nassim Taleb

“Be who you are and say what you feel because those who mind don't matter and those who matter don't mind.” - Dr. Seuss
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 Blz17 
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Andrew View Post
first really great thanks to Big Mike for that thread and of course for the whole forum.

secondly, I have question which may be somebody can help me answer.
I've interested to read just some simple books like Market Wizards or better like Pit Bull by Martin Shwartz
anyone can recommend something similar ?

Thanks in advance.

Krgds,
Andrew

I have not read it but I believe "Entries & Exits" by Dr. Alexander Elder is similar in design to Market Wizards. I plan on reading it soon. Also, don't forget there are two Market Wizards books, both of which are great.

Blz

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Andrew
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Blz,

Thank you.
I've read both Market Wizards.
Now I'm "dreaming" about Pit Bull and then want to find more similar books.
I enjoy memoirs a lot.
Reasons are simple :
- usually the only serious and well recognized person write memoirs
- memoirs usually very informative, if to read it attentively
- also...what is better, for example, to read book about politics written by some author "he thinks he pro in politics" or 4 book memoirs written by Churchill

Krgds,
Andrew


Blz17 View Post
I have not read it but I believe "Entries & Exits" by Dr. Alexander Elder is similar in design to Market Wizards. I plan on reading it soon. Also, don't forget there are two Market Wizards books, both of which are great.

Blz


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 cunparis 
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Blz17 View Post
I have not read it but I believe "Entries & Exits" by Dr. Alexander Elder is similar in design to Market Wizards. I plan on reading it soon. Also, don't forget there are two Market Wizards books, both of which are great.

Don't waste your time. It's not market wizards just some of his students who agreed to be interviews. They tell the basics of what they do and it's all based on indicators like macd. Then you get Dr. alex's comments on how he would have traded it, in hindsight of course! I didn't even finish the book.

if you want to go down the MACD divergence and indicator route, then I highly recommend it. But for everyone else, I say skip it.

Seeing people walk through their own trades, with comments in hindsight, I think it's painful. I'm reading joe ross's book "trading by the book". He decides to label a pt #2 when I don't think any normal person would have done that. Of course it gives him a great entry. Or labeling a #2 pt some place mid-bar that ends up giving a perfect fib retrace. I'm not accusing anyone of anything, just saying that walking through trades in hindsight isn't that accurate.

Now if someone made their chart and captured it and then goes back over it, that's a different story. but if I pull up a chart of CL from 2 months ago and start annotating it, well that's always a bit subjective..

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 cunparis 
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Andrew View Post
Now I'm "dreaming" about Pit Bull and then want to find more similar books.
I enjoy memoirs a lot.

I agree, I love that book and look forward to reading it again. One of the things I remember "Going for the gold!"

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Andrew
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Cunparis

I've not read that yet
Also what I want to read "God in Pits", I like how the brothers started, their story, it's a lot about strong personality and hard work.

Krgds,
Andrew


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I agree, I love that book and look forward to reading it again. One of the things I remember "Going for the gold!"


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Andrew
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Cunparis,

Thank you for advice.

I don't interested to read about MACD, what I want I know about it.
However when I've traded without any indicators, just volume and price I was consistently profitable, my "indicators period"...waste of time and money as well as "understanding of market". I wish I could never learned and used indicators

Krgds,
Andrew


cunparis View Post
Don't waste your time. It's not market wizards just some of his students who agreed to be interviews. They tell the basics of what they do and it's all based on indicators like macd. Then you get Dr. alex's comments on how he would have traded it, in hindsight of course! I didn't even finish the book.

if you want to go down the MACD divergence and indicator route, then I highly recommend it. But for everyone else, I say skip it.

Seeing people walk through their own trades, with comments in hindsight, I think it's painful. I'm reading joe ross's book "trading by the book". He decides to label a pt #2 when I don't think any normal person would have done that. Of course it gives him a great entry. Or labeling a #2 pt some place mid-bar that ends up giving a perfect fib retrace. I'm not accusing anyone of anything, just saying that walking through trades in hindsight isn't that accurate.

Now if someone made their chart and captured it and then goes back over it, that's a different story. but if I pull up a chart of CL from 2 months ago and start annotating it, well that's always a bit subjective..


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 goldilocks 
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cunparis View Post
I started listening to the audio book. I gave up after bout 30 minutes. It seems too touchey feely. letting go. Maybe it's cause I've learned to do this on my own but I don't feel like I have anything to let go of.

I guess if someone was really stressed or anxious bout trading maybe this book could help. but also if the person traded simulator for 6 months I think that would cure it too.

Anyone else tried it?

BTW no one recommended "Think and Grow Rich". That book is truly excellent and aimed at achievers and not losers.

Cunparis,
LOL!!! too funny... but maybe you don't have as many issues as some of us -- or maybe I should qualify that and say *me*.. or something. I tried the trading SIM part before I tried the book, but I traded very successfully in SIM -- but not live.

Anyway, maybe the book is too touchy feely for some. But I like it (some of you will just laugh and say "of course.." But that's ok.) It seems to help me. Needless to say, I seem to have issues with wanting approval and security.. definitely never any control issues.

I do find it's been helpful to be more aware what's driving my thoughts and behavior.. or what was in the past anyway. Being more aware hopefully will help.

On the other hand, I do also like the Napolean Hill book a great deal, too.

thanks!

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 jpk67fr 
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1 good french book about futures that I'm reading:

TRADING ET CONTRATS FUTURES DE BERNARD PRATS-DESCLAUX

Pour personne ayant déjà quelques bases en trading et analyse technique,
même si on retrouve un schéma assez classique dans le genre, ce livre est très pragmatique, ne vend pas du rêve mais permet une approche pratique basé sur l'expérience de l'auteur.

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 wh 
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goldilocks View Post

On the other hand, I do also like the Napolean Hill book a great deal, too.

thanks!

I listen the audio book ... and it is nice to hear, but now i know all is the same (Sedona, Core, Meditation ...)


Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 brucebx 
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So many books and so little time. Try to balance book on psychology, money managment, strategy development. Have stopped buying books and now just reading the ones I already own.

Mark Douglas, Brett Steenbarg and Van Tharp have excellent books on trading psychology.

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 wh 
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here my new book:


Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 Big Mike 
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wh View Post
here my new book:


Cool, so we can expect some fancy new indicators and strategies?

Mike

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 wh 
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i like this Art of War better then other

Causality is the relationship between an event (the cause) and a second event (the effect), where the second event is a consequence of the first.
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 ronan2505 
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Trade what you see, highly recommended. Goes from simply to more advanced harmonic numbers, Pattern Recognition etc, Also goes into money and risk management, another helpful section was trading a trend day.

Another of my favourites is one of Mikes above, Trading in the Zone

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 Bobcat 
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Golf Is Not A Game Of Perfect by Dr Bob Rotella.

This book is not about trading, however it was recommended to me by a non-golfing trading mentor. It is currently is on Don Miller's list of books to read.
There are many parallels between the psychological aspects of golf and trading. The book deals with mental preparation, confidence, decision making, decisiveness vs being correct, playing the high percentage shots, playing within your own capabilities, positive expectations and so on. The difference between top pros the middle of the pack, is only a few shots, and how they come back from a bad shot (or losing trade!). This is an easy read, and the principles can easily be applied to trading.

And it will definately help your golf game!

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 cclsys 
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Tsun Tzu's Art of War - the Denma Translation.
Rules of Victory - further commentary on Art of War by Denma Translation.

I know the translators. They spent years on this and know the subject matter in depth. If you take the time to read their truly superior commentary in the first book, the text opens up and becomes applicable to anything from running a business, a family, a lawsuit, a country, a war or... a trading campaign. The second book was a result of the many presentations they gave after publishing the first and is geared towards further interpreting the approach to all situations.

Pay special attention to sections on how to manage shih. It is a very simple, intuitive concept but one lacking in our culture. Briefly put: everything is interconnected and relative. A rock is solid relative to air but not compared to a sun crashing into it. Moreover, a rock does not move in most situations, but place a round rock on top of a hill and give it a little nudge, it will start rolling down and then become a destructive force for those below. That shift in energetic characteristics in a powerful way is 'shih'. It involves seeing into the nature of any situation and its component variables and learning how to perceive, anticipate or engender shih. Highly applicable to getting feel for markets.

Of old the skilled first made themselves invincible to await the enemy's vincibility.
Invincibility lies in oneself. Vincibility lies in the enemy.
Thus the skilled can make themselves invincible.
They cannot cause the enemy's vincibility.
Thus it is said: 'Victory can be known; it cannot be made.'
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 cbritton 
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I read this book a few months back and I find it very useful in applications to trading psychology.



Amazon.com: On Being Certain: Believing You Are Right Even When You're Not (9780312541521): Robert Burton: Books

This is not a book about trading, but more about the psychology of decisions.

It describes that feeling of being right, of the conviction that we make the right decision about something because it FEELS right and how this originates in the mind.

Here's another book along the same vein a friend recommended, but I have not read:




Amazon.com: Blind Spots: Why Smart People Do Dumb Things (9781591025092): Madeleine L. Van Hecke: Books


Regards,
-C

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 Big Mike 
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Thanks. I am looking for a good crowd psychology book written in the context of the market, if anyone has recommendations.

Mike

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 thatguy 
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Big Mike View Post
Thanks. I am looking for a good crowd psychology book written in the context of the market, if anyone has recommendations.

Mike


These might be of interest to you:

Amazon.com: Extraordinary Popular Delusions and The Madness of Crowds (9781578988082): Charles Mackay: Books

Amazon.com: Mobs, Messiahs, and Markets: Surviving the Public Spectacle in Finance and Politics (Agora Series) (9780470474808): William Bonner, Lila Rajiva: Books

Amazon.com: Trading With Crowd Psychology (Wiley Trading) (9780471387749): Carl Gyllenram: Books

Amazon.com: Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich (9780743276696): Jason Zweig: Books

Amazon.com: The Little Book of Behavioral Investing: How not to be your own worst enemy (Little Book, Big Profits) (9780470686027): James Montier: Books

Amazon.com: Behavioural Investing: A Practitioners Guide to Applying Behavioural Finance (Wiley Finance) (9780470516706): James Montier: Books

Amazon.com: Fear, Greed & Panic: The Psychology of the Stock Market (9780471486596): David Cohen: Books

Amazon.com: The Psychology of the Stock Market (9781596051232): G. C. Selden: Books

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 Fat Tails 
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Hersh Shefrin: Beyond Greed and Fear
Martin J. Pring: Investment Psychology Explained




Now if the subject is extended a little bit you might have a look at agent based artificial societies. One of the playgrounds would be Sugarscape - Growing Agent-based Artificial Societies ( www.sugarscape.sourceforge.net)

Those are dumb and simple creatures, but behave in a similar way as human crowds. Basically shows that nonlinear systems mostly do not have equilibrium points but tend to spend considerable time in seemingly stable configurations before breaking out of these in a violent manner. Trading ranges followed by trending moves. Without these properties of non-linear systems we would only see Gaussian distributions and random markets, and mean reversion models as traded by LTCM might actually work.

Some books that extend the subject a little bit to individual behaviour and behavioural economics (it's a bit off-topic, but I enjoyed the reads):

Robert A. Akerlof and Robert J.Shiller : Animal Spirits
Ori Brafman and Rom Brafman: Sway -The Irresistible Pull of Irrational Behaviour
Richard H. Thaler: The Winner's Curse




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 benbrooke 
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guys,

for all people who like to read market profile, Markets and Market Logic

ben

Keep on sowing your seed, for you never know which will grow -- perhaps it all will.

-- Albert Einstein
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 Fat Tails 
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Have just come across a recommendation by Brett Steenbarger (from his blog), looks interesting, so I just put in on my shopping list...

Richard L.Peterson: Inside the Investor's Brain - The Power of Mind on Money


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 Tiberius 
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After reading the posts on futures.io (formerly BMT), I just got my new book from Amazon by Al Brooks on Saturday. futures.io (formerly BMT) is a great web site, traders for traders. Nobody trying to sell you some junk and profit. The only profit we are interested in is from the markets. Alot of great systems and indicators for which I am totally confused. Coming here with my own system makes it more confusing. Any how that is why I bought the book. Begin with the basics and move forward. Add a (very) few indicators (maybe) and in a few years change my status to advanced trader. Thanks to all futures.io (formerly BMT) members. Love the d9.

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 Fat Tails 
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As a supplement to the two highly recommended books from James F. Dalton (see earlier post)....


Here is the link to the original Market Profile Handbook from CBOT, which can be downloaded for free.

https://www.cmegroup.com/education/interactive/marketprofile/handbook.pdf

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 tulanch 
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Reading Price Charts Bar by Bar, Al Brooks
Technical Analysis of Stock Trends Edwards and Magee
Trading the Ross Hook,Joe Ross
The Disciplined Trader, Mark Douglas
Trading Chaos, Bill Williams
The Master Swing Trader, Alan Farley
Technical Analysis of the Finacial Markets, John Murphy
Day Trading Futures The Manual, Malcolm Robinson

online - Lance Biggs site with emphasis on candles, price action and trapped traders - great, easy to understand free videos

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 Fat Tails 
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Books I have read (not all of them finished yet) and that I recommend:

Gerald Appel: Technical Analysis: Power Tools for Active Investors
Constance Brown: Technical Analysis for the Trading Professional
Tushar Chande: Beyond Technical Analysis
Michael W. Covel: Trend Following
Thomas R. DeMark: New Market Timing Techniques
Perry J. Kaufman: New Trading Systems and Methods
John Murphy: Intermarket Analysis
Jack D. Schwager: Technical Analysis
J. Welles Wilder: New Concepts in Technical Trading Systems
Chris Wilkinson: Technically Speaking















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 Big Mike 
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fxfib, your post was removed - don't post that in an open forum.

Fat Tails, please use the Report Post feature as opposed to taking matters in to your own hands

Both posts deleted.



Carry on...

Mike

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 fxfib 
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sorry mike. duly noted.

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 Fat Tails 
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Have just read this book

Bertrand M. Roehner: Patterns of Speculation - A Study in Observational Econophysics

It is not something you can easily apply to day trading, but nevertheless an interesting read.

The book has four chapters

- Econophysics
- How do markets work?
- Regularities in speculative episodes
- Theoretical Framework

The author tries to identify regularities in speculative peaks. Peaks are separated into U-class and S-class. U-class (sharp) peaks can be observed fo commodities, whereas S-class (flat) peaks can be found for real estate, stamps and bonds. The author uses statiistics from several centuries to substantiate his ideas.

The last chapter requires a solid knowledge of mathematics, I decided to postpone any effort to try to understand it. However, three quarters of the book does not require more than some basic understanding of statistics.






There is another book on the topic of modelling bubbles, which in my opinion is more complete. But then again, this book requires at least some undergraduate knowledge of mathematics.


Didier Sornette: Why Stock Markets Crash - Critical Events in Complex Financial Systems



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