Traders' Book Club

The purpose of this thread is facilitate open discussion of trading-related books in a format akin to the Video Store or Comedy Club. Post whatever you want about a book--positive or negative. There was another thread in this forum discussing "best forex books"… http://www.forexfactory.com/showthread.php?t=6826 ... but this thread is for a broader and perhaps more in depth discussion.

Post your favorite or least favorite trading books or identify specific parts of a book you find useful. My hope is that this thread will become a resource for new traders or anyone unfamiliar with different books.

Let me start off by listing some of my favorite trading books.
(Not necessarily in order, though #1 is my favorite)

1. “The Intuitive Trader” by Robert Koppel
2. “Market Wizards” and “New Market Wizards” by Jack Schwager
3. “Way of the Turtle” by Curtis Faith
4. “Beyond Candlesticks” by Steve Nison
5. “Trading for a Living” by Alexander Elder
6. “Trading in the Zone” by Mark Douglas
7. “The Art of Contrary Thinking” by Humphrey Neil
8. “Tape Reading & Market Tactics” by Humphrey Neil
9. “Studies in Tape Reading” by Rollo Tape
10. “The Crowd: Extraordinary Popular Delusions” by LeBon & MacKay
11. “Pit Bull” by Marty Schwartz
12. “Martin Pring on Market Momentum”
13. “Trader Vic” by Victor Sperandeo
14. “Zen and the Art of Poker” by Larry Phillips **Not a trading book but related
15. “The Art Of War” by Sun Tzu **Not a trading book but related
16. “How I Made One Million Dollars Last Year Trading” by Larry Williams
17. “The Trader’s Tax Survival Guide” by Ted Tesser **since it is tax season

None of the books mentioned above are specifically Forex books and they’re all fairly old, so maybe you have some new ones or more specifically for forex trading:

My favorite trading books tend to be interview books with successful traders, as I find that particularly useful to hear their insights. For that reason, I also include the following PDF “Phantom of the Pits” which appeared in Futures Magazine in 1997. I find it to be a good read.

Another book I like is Ed Toppel's "Zen and the Markets." In it he said that "successful trading boils down to the following simple rules:

1. Never add to a loser.
2. Only add to a winner.
3. Let profits run.
4. Cut losses fast.
5. Don't pick tops
6. Don't pick bottoms.
7. Let the market, not your ego, make the decisions."

For some reason, I've always found it a lot easier to add to a loser than winner. Human nature I guess.

Okay, one more book quote and I'm done from the evening. This one from The Intuitive Trader

"If we would attempt to make specific statements about exactly what separates the best from the rest of the pack, I think you too would agree with the following:

1. They understand their motives for trading.
2. They develop trading strategies that work for them because they fit their personality.
3. They enjoy trading and make it effortless.
4. They work hard at developing their skills and maintaining a trading edge.
5. They trade with total confidence in themselves and their methodology.
6. They trade in a positive state of mind that allows them the flexibility to act automatically and know what is the next right step to take.
7. They intuitively understand money management and risk control and "know" that no single trade is worth not being able to trade tomorrow.
8. They have a strategy that works and the discipline to carry it forward.
9. They are independent minded and understand that they are personally responsible for all market decisions.
10. They understand the difference between loss and losing.
11. They understand the importance of acting at different times with circumscribed risk.
12. hey know what drives markets and what is the difference between hope and fear.
13. They don't trade to please others."

Not quite. Usually they use their spare time to play "what if" situations which they might encounter during trade, so when a similar situations really happens they already knew what to do.

I can see your point, but I don't think it's that far off from what Koppel was suggesting. The idea is that you prepare yourself beforehand for any outcome. The worst thing to do is hesitate when it's time to act--especially exiting a trade. Either the move goes your way or it doesn't, or it does for a while then stops.

I do think that Koppel's point to "trade in a positive state of mind" is worth noting. I certainly trade a lot better with the right attitude and mental outlook, accepting whatever I'm handed rather than "hoping" or getting agitated. Quick decision making is critical. Actually, if you know what you're doing ahead of time, there really is no decision. You may already have a stop or limit order in place.

Elsewhere in "Intuitive Trader" Koppel is interviewing Tom Belsanti.

"Question: You know, Tom, there's a whole body of research that relates peak performance in sports to one's personal psychology: attitude, motivation, goals, beliefs, and anxiety control. Do you believe that same relationship holds true for trading?

Answer: I believe unquestionably that there is a link between the two. When I look back on my days playing football and baseball, motivation and focus are key. Since I have a history of playing competitive sports, I know you have to pay the price if you want to win. Trading is no different. I think the analogy also applies to intuition.

In the same way you develop a capacity to anticipate in sports when you play calm and relaxed, that too applies to trading. You have to learn how to get in touch with the way you're personally feeling the market. The intuition grows out of being able to monitor yourself and know how you feel about that particular market situation. You have to know the difference between a trade that feels right and one that feels wrong. I don't think any book or person can teach that. It comes from a lot of experience and desire to learn."

I can see a parallel between sports and trading. There is actually another book that is good for trading in an intuitive way called "Putting Out of Your Mind." It's a book about golf but it relates very nicely. It says in that book that when you are putting correctly you're not thinking at all, you're just doing. I think at least for discretionary short-term traders where speed is of the essence and who have to enter or exit on the fly, the same principle applies.

Oh, I didn't see that Jay Walker had created a thread in the Trading Discussion forum called "The Book Club." I guess great minds think alike.

http://www.forexfactory.com/showthread.php?t=151425

There haven't been any replies in that thread for over a month so maybe it's alright that I created this one.

Good list of books by wormboy on the other thread.

Anybody else have any good books worth reading?

Hmmm, looking along my bookshelf at really solid useful books:
1) Trading & Exchanges - Larry Harris
2) Microstructure Approach to Forex - Richard Lyons. Heavy-going, a bit out-dated, but worth it
3) Psycho-cybernetics - Maxwell Maltz (not a trading book, but related)
4) Mind over Markets - Dalton et al. Not a psychology book - all about market profile
5) Dummies Guide to Currency trading - say what you like, it's one of the best books about FX out there. The four books above won't be to everyone's taste depending on how you trade, but this one is exceptional.

Love the market wizards books too.

While we're about it: the most expensive book that told me nothing at all was Tom Demark's New market timing techniques. Bobbins.

triphop,

Thanks for sharing. I'll have to check those out. Sounds like some good ones.

Thanks for the books. I have read the Phantom of the Pitts, very nice indeed.