Archives of “January 11, 2019” day

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20 BOOKS EVERY TRADER SHOULD KNOW ABOUT.

  
  Education
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As with every list, there will be disagreements.  ”Why is that book on the list?”  ”Whyisn’t that book on the list?”  I picked 20 books that stood out for me as a trader, that were a #valueadd (or a #valueloss) for one reason or another.  That doesn’t even have to mean that they are about trading.  For example, the “General Interest” section is made up of books that I think appeal to a trader’s mindset.

With that in mind, feel free to add your picks to the “comments” section, along with a sentence or two as to why you liked (or hated) them.

By the way, I was too lazy to link all the books, but you can find them all at Amazon.

Old School:  

The Market Wizards Series – Jack Schwager:  Chances are you will find these books on the shelf of any serious trader.  They are without a doubt the most comprehensive collection of interviews with superstar traders ever published.  However, their dirty little secret is that although they capture perfectly a moment in time, they are extremely dated and will give you almost no insight into today’s markets or how to trade them. Their value now is in showing how even the greatest traders initially struggled and often blew up (repeatedly) before becoming successful.

Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets – Stan Weinstein: This book was the first to quantify one of the most important concepts in trading; the four stages in which stocks move, which are the basing, advancing, topping, and declining stages.  Despite the fact that the cover of this book has not been updated since it was published in 1988, stage analysis is still relevant today.

How to Make Money In Stocks – O’Neil:  As an unnamed trader friend of mine recently said, all you need to do is review the charts in the first 150 pages of this book and you will be good to go.    These charts along with O’Neil’s annotations, give you a great foundation to understand the patterns stocks form before they go on massive runs. (more…)

A Master of Persuasion Reveals his Secret

  
  Education

This review reads like Robert Cialdini’s work:

 First, though, you need to outfit yourself with the basic knowledge, and Mr. Dutton’s research suggests there are five key elements, which he wraps up in the acronym SPICE. (His use of quippy anecdotes to begin each chapter, and his instinct for neologisms – the book was published in the U.K. as Flipnosis – illustrate his own canny knack for persuasion.) SPICE stands for Simplicity (that is: don’t complicate matters), Perceived self-interest (someone will only be persuaded if they believe what’s on offer will benefit them), Incongruity (the tactic, which throws off the target, often takes the form of humour), Confidence, and Empathy. Most of these, of course, are incorporated in the best ads for products, services, and politicians. But they also form the basis of the come-ons of, say, used car salesmen, so Mr. Dutton positions his work as an antidote to unwanted appeals.

“I think the people who read the book will not only learn the tricks of the trade – how to persuade – but they’ll also know what to look for when such persuasion is angled at them,” he says. “With knowledge comes protection.”

The fact that some need that protection more than others – some are more persuadable – has led to a frenzy of scientific research. Neuroscientists are busy trying to read the brain’s responses to various persuasive stimuli: Indeed, a study published last month in the Journal of Cognitive Neuroscience suggested there is a network of regions in the brain that responds to the act of being

TRADER’S AWARENESS ZONES

  
  Education
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If you know who the enemy is and you know yourself, you will never fear the next trade.  If you know yourself but not the enemy, you will win one lose one.  If you do not know the enemy or yourself, you will lose on each trade. Sun Tzu Trader

The very best traders develop market awareness zones as a form of checks and balances for unbridled behavior.   In other words, no sound trading strategy should be based solely on an indicator but on several carefully designed tactics that form a strategic whole, much like a successful football or basketball team relies on a game plan carried out by several players working together, not one player acting alone.  In military terms, all branches working together to defeat a common foe.

The 3 Most Confusing Things Your Math Teacher Ever Told You

  
Analysis, Education, Life
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Now that the fall term of school is over, we can all relax for the holidays. Here’s a gift to everybody out there, students and teachers and especially parents, who might still be befuddled about some of the more puzzling things that came up in math class. This is why the teacher said what she said.

1) You can’t divide by 0.

Why not? Well, because if you try to, no matter what answer you write down, it won’t make sense. Take 6 divided by 0. What should that equal? A lot of people guess 0. But that doesn’t work. If 6 divided by 0 were equal to 0, that would mean that 0x0 would have to equal 6 (just as 6 divided by 2 equals 3 means that 2×3 equals 6). The trouble here is that 6 divided by 0 cannot equal any number, because any number times 0 always gives 0, not 6. This is why division by 0 is verboten.

2) 1 is not a prime number (more…)

Trading Wisdoms

  
  Education
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“Never let the fear of striking out get in your way” – Babe Ruth

“If you can’t take a small loss, sooner or later you will have to take the mother of all losses” – Ed Seykota

“Don’t think about what the market is going to do. You have absosutely no control over that. Think about what you are going to do if it gets there.” – William Eckhardt

“I turned from a loser to a winner when I was able to separate my ego needs from making money. When I was able to accept being wrong. Before that, admitting I was wrong was more upsetting than losing money” – Marty Schwartz

“The worst mistake a trader can make is to miss a major profit opportunity. 95% of the profits come from only 5% of the trades” – Richard Dennis

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