RECOMMENDED READINGS FOR DAY TRADERS/SWING TRADERS...
First, I will get to ALL the other question this weekend during the evenings. I have not forgotten about anyone.
I wanted to answer this question right now because I really feel the only way to get better at something is to continue to 'immerse yourself in it'. Thus, I firmly believe in Stephen Covey's principle of always 'sharpening the saw'.
I have read many, many trading books and as I said earlier I believe the electronic daytrading books are going to provide the most help to LEVEL II day and swing traders. I will list the books I recommend below by category along with a brief synopsis:
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PSYCHOLOGY OF TRADING:
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"THE DISCIPLINED TRADER" -- Mark Douglas
This is probably the BEST book on trader psychology ever written. If you feel that part of your problem is some kind of mental 'block' that causes you to hesitate when it is the moment of truth then this book will help you. Every trader should have this particular book in their library. It goes deep into the psyche and explains why trading is so inherently against everything we learned growing up.
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DAY TRADING STRATEGIES:
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"Tools and Tactics of the Master Day Trader" -- Oliver Velez & Greg Capra
An A to Z reference of outstanding trading tactics, explanations, pitfalls and ideas. One of the all-around most thorough trading manuals ever written IMHO. One of the things I have always liked about Mr. Velez is his very 'cautious' approach to trading. Unlike many other bravado books on day trading Mr. Velez cautions traders of pitfalls at every opportunity. He preaches a modest, workable approach and the strategies therein are all excellent. Worth the hefty price tag and then some.
"STRATEGIES FOR THE ONLINE DAY TRADER" by Gonzalez and Rhee
A great summation of strategies and tactics specifically written for LEVEL II day traders. While not all tactics are available in today's super-competitive marketplace, many invaluable gems lie within this book. Another great read for all you LEVEL II guys looking for one or two new ideas to add to your portfolio of strategies.
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TECHNICAL TRADING:
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"HIT AND RUN TRADING I & II" by Jeff Cooper
While any book in this category is going to be among the priciest trading books out there, the Cooper books stick to a specific purely chart-based style of trading. If you use a purely mechanical (stop-based) system these books can help swing the odds in your favor. Remember, with a mechanical system the money management aspect is a given (hence mechanical) so all you are looking for is some slight 'edge'. Once you have a winner Cooper has some suggestions on how to 'scale out' and protect profits. However, these books are very pricey and not recommended for novice traders looking to learn everything.
"TNT TRADING I,II,III, & IV" by Mark Cherlin
Again, a very pricey series of books. While I found some of the writing cumbersome and long-winded at times, Cherlin hammers home the essence of proper trading and discipline in this series. I did find them extremely useful and full of good information and at the same time a very tedious read. If I had to recommend only one in the series it would be TNT TRADING III.
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MARKET MAKER'S PERSPECTIVE:
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"THE MARKET MAKER'S EDGE" by Josh Lukeman
Mr. Lukeman is an institutional market maker for Morgan Stanley Dean Witter (MSCO). He explains many of the indicators and general strategies that the MSCO block traders use. He also gives examples of trades and what goes on in the inner workings of block trading desks, which will give you a better idea how this 'big money' is handled. A very interesting read as well as useful for many new traders who might want some insight as to what is and is not important things to know and track during the trading day.
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TRADER'S MINDSET:
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"ELECTRONIC DAY TRADER'S SECRETS" by Marc Friedfertig and George West
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"MARKET WIZARDS" and "THE NEW MARKET WIZARDS" by Jack Schwager
All the above listed books give the perspective and mindset of the biggest 'little guys' (Day Traders) and the biggest 'big guys' (the Monster money managers and institutional traders). This type of reading is the 'immersion principle' that I explained. Get inside the minds of your competitors and know how and what they think. This type of reading can help you even on a subconscious level, IMHO, and give a familiarity and confidence to face the market by knowing what the real players are thinking. Again, my opinion but I believe a full commitment to the market pays dividends.
I hope that helps and I will recommend more good books as I come across them (I am sure I forgot some here).
All the best,
-- Gene |
