Unless it takes you in the wrong direction. Then it can be worse than useless if you haven't gotten your bearings yet.
I am brand new to this forum, but I thought that as a rookie trader of about 1 year, I would like to add my 2 cents to the discussion from my personal experience so far. First of all, I definitely do not think that books are useless. Are people's expectations from these books unreasonable at times? Yes. I have read a few books. I would say about at least 10. Most of the information I have learned has been from online resources. Regardless, I have learned bits and pieces of information from almost every source I have encountered. I don't think there is any one resource that will just show you the way (besides a legit and probably paid mentor) and all of a sudden you will know how to trade after reading it. No. It is a trial and error process that you must piece together yourself over time by getting nuggets of information from various sources and then applying them to your trades through live experience. Not demo, but live. More to the point, books will get you started and get you a basic understanding of how to trade, but they will not teach you how to trade. Think of almost any other profession. Take being a mechanic for example. Just because you read books on how to fix a car, it doesn't make you a mechanic. You may know how a car works and how to fix it in theory, but getting under the hood and actually doing it is a totally different story. Same with trading. There are just aspects to trading that cannot be taught through reading a book. You need real world experience for that. You need to experiences losses and drawdowns and the uncertainty of trends and all these frustrations first hand and react to them appropriately. Just my 2 cents.
Book Review: Cracking the Emerging Markets Enigma by Andrew Karolyi While this book is probably better geared for the more academically inclined, or for institutional investors, the comprehensive risk framework Karolyi presents is well-reasoned and is generally comprehensible to the lay reader. While I was familiar, at least anecdotally, with many of the issues covered in this book, it was fascinating to see a quantitative mind attempt to corral these issues in a coherent way, and integrate them into a general framework. And while big picture is great, the detail is also quite stunning. Thinking about investing in Slovenia? You may be surprised to see it ranks ahead of Japan and Germany for governance and corporate transparency. Another takeaway I had after reading this book is that while we tend to lump countries into different buckets, each with a descriptive label that describes its risk, the truth is that risk measures are much more fluid and have more gradation than we assume. A country that is labelled as an “emerging market” may not be an emerging market from a risk standpoint. And Koralyi's model seems like a reasonable place to start for thinking about these issues. I look forward to seeing what Koralyi delivers in the form of additional out of samples tests as the future unfolds. Finally, this book is a great addition to the bookshelf for the educated investor. The post Book Review: Cracking the Emerging Markets Enigma by Andrew Karolyi appeared first on Alpha Architect.
Jason Alan Jankovsky is a very good trading mentor. I've read all his books. JAJ lays it all out there for the average delusional trader. Your TA isn't going to get the job done, both sides of the trade have a chart, they THINK they have high probability, and only one side can win when order flow decides the matter. Embrace the obvious, if millions of traders are breaking even (absent costs and mistakes) then they have exactly 50% probability and need something more to make, and keep money.
The problem today is too much information, not too little. Your goal is to glean through all of this material, irrelevant facts, and downright cancerous baloney, and: 1) Get the data you need (easy), and 2) Get your head straight (almost impossible when surrounded with a million screaming poop throwing monkeys who don't know what the heck they are talking about). There are a lot of dangers along the way that ensure you are not going to win at this game, one of them is spreading your attention everywhere. I am guilty of getting on the internet and doing the squirrel thing, scurrying all around and getting nothing done. Books force you to focus your attention on one thing. I'm a little surprised that someone so new to trading seems to think reading 10-20 books is too much work, or a waste of time. I've read over 300 books on trading and related topics, and I agree it's diminishing returns, but they do give you new ideas. Rather than accepting this as a criticism, maybe you should feel complimented, because you figured out the correlations between the people who just break even. The more you read, the more you realize that everybody is DOING, not THINKING, but DOING the same things, and everybody is therefore getting the same results. Even if you are a Nobel Lauriat with a size 9 hat, if you enter with Joe six pack, his ORDER FLOW, and people like him ensure you are going to get the same results. Look, this isn't a criticism. But I'm not sure you understand what it takes to make money and hold onto it. This is going to be a multi thousand hour slog. You are right about books, diminishing return. If you really want to learn, read and download every interview of traders you can find and look for correlations between what the winners and losers say, because believe me, it's all there for anyone who wants to flush what he thinks and learn what needs to be done.
Reading books is entertaining when you are new to trading. I remember wanting to get my hands on everything. The only struggle is actually implementing everything. The best thing to do is find someone who's profitable and who's strategy makes sense to you.
James Altucher A) SHOULD I DAYTRADE? Only if you are also willing to take all of your money, rip it into tiny pieces, make cupcakes with one piece of money inside each cupcake and then eat all of the cupcakes. Then you will get sick, and eat all of your money, but it will taste thrilling along the way. Which is what daytrading is. B) I DON’T BELIEVE YOU. MANY PEOPLE DAYTRADE FOR A LIVING. No. I personally know of two. Maybe three. And they work 24 hours a day at it and have been doing it for a decade or more. So unless you want to put in that amount of time and be willing to lose a lot first then you shouldn’t do it. One more thing: when you daytrade and lose money it’s not like a job. When you go into a job you NEVER lose money. If you show up for two weeks, you get paid. Even if you have been warned repeatedly about sexual harassment you still get paid. You might get fired but they won’t take your money. The stock market TAKES your money on bad days. Sometimes it takes a lot of your money. We’re not used to the brutality of that and it can destroy a person psychologically, which makes one (me) trade even worse.
Read all the books you can get a hold of. When you think you know how to trade then begin trading with real money. Start small and as you gain confidence increase your bets until you reach your cringe point. Remember to always firm up your good habits and to correct your bad habits as you progress. You won't succeed until you have destroyed your bad habits.