Learning from books

isamel

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Hello all,

I apologise sincerely if I have submitted this post in the wrong forum, however, I have some questions to ask.

For approximately a year ago I lost about 20% of my capital and I was "clever" enough to know that I am one of all of those who entered the market without any knowledge and thinking I would make more money than the others since I am smart. Obviously not.
The way to be successful in trading is to constantly learn, I have been taught this by a very smart guy.:)

Now, I keep reading books about trading, but they never seem to "stay" in my mind. Now obviously you cannot read a book and 100% of the book stays in your mind, that's not possible. So my question is, what DO YOU THINK, is the best way to learn trading from books; and how to learn the MOST OF THE BOOK?

Thank you.
 
Would you learn to drive by reading your cars instruction manual and the highway code?

Trading is as much a cognitive skill as it is an intellectual one. Practise is required.
 
Yes, I agree very much on this. But I still do believe one has to read alot about it before just entering and trading "to see what happens".
 
Would you learn to drive by reading your cars instruction manual and the highway code?

Trading is as much a cognitive skill as it is an intellectual one. Practise is required.

Damn right u have to trade to learn to trade just open up a demo or micro account etc.

When I first started out I bought loads of books I must have about 20+ and I would say that maybe 2% are useful. I wouldnt recommend buyin/reading books I would just read through forums and stuff on the web. Be careful there is alot of crap to wade through on the web.
 
Damn right u have to trade to learn to trade just open up a demo or micro account etc.

When I first started out I bought loads of books I must have about 20+ and I would say that maybe 2% are useful. I wouldnt recommend buyin/reading books I would just read through forums and stuff on the web. Be careful there is alot of crap to wade through on the web.

Yes, I agree very much on this. I tend to think about reading books instead of internet-pages on this way: the books are "filtered". You see anyone can start up a website and write wrong things about trading etc. But not anyone could write and publish a book.
Anyway, I agree on what you both are saying.
 
Well, to get published, you have to write what the publisher thinks will sell the book...
 
Yes, I agree very much on this. But I still do believe one has to read alot about it before just entering and trading "to see what happens".

Seriously, open a demo account, stare at the screen and trade. You will learn more doing this than any book or website can articulate. Trading is experiential.
 
Yes, I agree very much on this. I tend to think about reading books instead of internet-pages on this way: the books are "filtered"

I cannot think of one book that would give you enough info to start trading.

You see anyone can start up a website and write wrong things about trading etc. But not anyone could write and publish a book.


I can see what you are saying u are right that anyone could open up a website and put on any old crap but u need to apraise what u read on the net.

defo open a demo account.
 
The thing about gaining experience trading is you can eventually pick up on who is talking crap on blogs/forums.
 
i remember i thought 'i'm crap at TA, ill buy these books and i'm sorted!'
well i bought the likes of john murphy's book ... it's actually great for facts about TA, not opinions. but i tried them ideas on a demo account on forex and blew 40-50 demo accounts...thats right...in 2 months
:eek:
 
Hello all,

I apologise sincerely if I have submitted this post in the wrong forum, however, I have some questions to ask.

For approximately a year ago I lost about 20% of my capital and I was "clever" enough to know that I am one of all of those who entered the market without any knowledge and thinking I would make more money than the others since I am smart. Obviously not.
The way to be successful in trading is to constantly learn, I have been taught this by a very smart guy.:)

Now, I keep reading books about trading, but they never seem to "stay" in my mind. Now obviously you cannot read a book and 100% of the book stays in your mind, that's not possible. So my question is, what DO YOU THINK, is the best way to learn trading from books; and how to learn the MOST OF THE BOOK?

Thank you.

Are you trying to take too much onboard too quickly? You will have assimilated an awful lot of knowledge by the time you become a proficient trader - and for most people that takes time. When you start out it is difficult to know what is essential and what can left until later - yes, all the info is available on the net for free: but even if you know where to find it you probably won't be able to differentiate between the cr@p and the good stuff let alone a suitable order of priority.

My suggestion is to read just a few books - primers - that will get you started with good solid basic principles - eg. what the market is about and how you can trade it. It is so easy to get sidetracked with things like "tight spreads" and platform interfaces rather than mastering the basics. The fancy stuff is all fine-tuning that can wait till later when you will know how to benefit from it. There are loads of interesting books on advanced techniques (which may not make you any money, but they are interesting) which you can use to derail yourself later when your first flush of "I've cracked it" occurs! Just remember - it all takes time and you have to start at the beginning: even fighter pilots' first flying lesson is just attempting to make the aircraft fly straight and level.

I think John Forman's book is a good starter and for my money Elder and Van Tharp are also worthwhile (though Tharp's not everybody's cup of tea). You shouldn't have any problem retaining the basics from books like these - if you do, then you might do better with fishing or some other relaxing pursuit. :)
 
What brokerages offer demo accounts?

Also what other software would I need to use?

Open a demo account with a spread betting firm like IG which has its own web based execution and charting package. You won't need to spend anything or think about brokerages/feeds/commissions/etc and it will allow you to get a sense of how different markets move and behave over different timeframes. Essentially demo will allow you to:

a) Find a market that suits you
b) Find a timeframe(s) that suits you
c) Derive a trading plan/money management/risk profile that suits you
d) Start with pretend money and then eventually switch to trading small sums of real money (don't underestimate this jump as this is when your psychology really kicks in)

Reading in the background to support this behaviour will as Ninja says, allow you to figure out what is and isn't important to you.

If you're not in UK, then popular brokerages like Interactive Brokers support demo trading on their TWS platform.

Books I have found useful in the past in the order I read them too:

Technical Analysis of Financial Markets (John J Murphy) - The TA bible. Useful if you are going to incorporate TA into your method which I think most people do to some degree or another.

Way of the Turtle (Curtis Faith) - Highlights that having a plan and a method is not the only factor. Shows that technical methods are prone to human interpretation and human interpretation is the primary reason for plan failure.

Mastering the trade: Proven techniques for profiting from intraday and swing trading setups (John Carter) - Very useful book for explaining trading techniques. Used this as my initial introduction to some trading strategies. One that should be read later rather than earlier in your career as it assumes that you can read price to some degree which at the outset, most newb's cannot do.

Trading & Exchanges: Market Microstructure for Practitioners (Larry Harris) - Goes through the market structure and participants, their roles and interactions. Helped me realise that in order to be profitable, you have to provide a service in the market that is useful to other participants.

Trading in the Zone (Mark Douglas) - Emaphasis the importance of a plan and how basic human emotions significantly distort your reasoning. Usually the start of unravelling phsychological barriers that affect trading.

The psychology of trading: tools and techniques for minding the markets (Brett N. Steenbarger) - Shrink examines most common head problems affecting trading. Further insight into our tiny minds and how they damage trading performance.

The secrets of economic indicators: hidden clues to future economic trends (Bernard Baumohl) - Explains the significance of macroeconomic data that moves capital markets around. Allows you to form independent opinions about the meaning of the numbers to bias trade decisions.

New Monetarism (David Roche) - Explains macroeconomic structure of the world that has existed for the last 30 years. Useful for contextualising correlation of markets.

Reminiscences of a Stock Operator (Edwin Lefèvre) - Biography of Jesse Livemore. Highlights that human behaviour that drove markets in the 20's is equally as valid today. Insights into trading behaviour of one of the greats.

Extraordinary Popular Delusions and the Madness of Crowds (Charles Mackay) - History revealing how crowd psychology affects behaviours. Historic chronicle of what happened with South Sea Bubble, Mississippi Scheme. More reinforcement of what happens in markets as bubbles form, burst, reform, etc

Market wizards:interviews with top traders (Jack Schwagger) - Self explanatory. Useful to see common themes that these guys share (discipline, patience, knowing when to bet big, not caring about money, playing good defense)

On top of this there has been countless stuff I have read on the internet, too numerous to mention.

Good luck.
 
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i remember i thought 'i'm crap at TA, ill buy these books and i'm sorted!'
well i bought the likes of john murphy's book ... it's actually great for facts about TA, not opinions. but i tried them ideas on a demo account on forex and blew 40-50 demo accounts...thats right...in 2 months
:eek:

Blowing 40-50 demo accounts in 2 months and you think the problem was the TA? lol.
 
Old Chinese proverb ..............

It is better to travel 1,000 miles than to read 1,000 books.

Bloody sight easier too !!!!!!!!!!

Doing is learning my friend.
 
Forex trading books and education in general is vital for surviving in such a competitive market! But at the end of the day there is only so much you can learn from a book and theory needs to be put into practice. That’s where the demo account steps in and should be used for a considerable amount of time before even thinking to invest! I have gone through various top broker sites and feel satisfied with mine FxPro http://www.fxpro.com/open-account . The majority of broker sites offer such demo accounts as well as great knowledge base centers. As a result you’re learning experience will be a lot easier than just reading a forex trading book.
 
Have you ever wondered how a raw person end up becoming a trained doctor, engineer, MBA etc? Here is an answer to our human destiny:

There are about 100 billion neurons cells which are connected with 1000 trillion synapses in Brain. When you learn some thing new, a neuron cell is used. When you revise that learning, neurons gets strengthen and neurons communicate with each other through synapses.

Revision is mother of all learning. A discretionary trading system requires you to understand, learn, memorize and revise trades every day making patterns out of them. A discretionary trading system is like a training to become a doctor. The best thing that can help is making journals every day and saving charts.

If you are a mechanical trader, then again it involves how good your practice is - How well you have trained neurons and synapses in your brain.

Find out what kind of trader you are and then practice that trading system for a couple of years to strengthen neuron network inside your brain.
 
Trading in the Zone (Mark Douglas) - Emaphasis the importance of a plan and how basic human emotions significantly distort your reasoning. Usually the start of unravelling phsychological barriers that affect trading.

The psychology of trading: tools and techniques for minding the markets (Brett N. Steenbarger) - Shrink examines most common head problems affecting trading. Further insight into our tiny minds and how they damage trading performance.

Reminiscences of a Stock Operator (Edwin Lefèvre) - Biography of Jesse Livemore. Highlights that human behaviour that drove markets in the 20's is equally as valid today. Insights into trading behaviour of one of the greats.


Market wizards:interviews with top traders (Jack Schwagger) - Self explanatory. Useful to see common themes that these guys share (discipline, patience, knowing when to bet big, not caring about money, playing good defense)

On top of this there has been countless stuff I have read on the internet, too numerous to mention.

Good luck.

I know ive said not to bother with books as most the ones I have are $hit but the ones above are really worth reading.
 
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