My idea is to set up a Book Library in the "resource library" section. Members who've read a good book on Technical Analysis, Fundamental Analysis, Economic Theory etc could enter the title, author, ISBN, publisher and a few comments and a recommendation. Other readers could add their views which might agree or disagree.

We all want to learn more. So what books have you read? Which ones were useless or brilliant?

Which ones are the best for covering topics like Gann? Learning Metastock?

 

hi,

nice idea, I like reading, hope get more news about this.

 

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software reviews

In my opinion technical analysis books are good only for beginners until they realize that to have a chance in the market one must come with his own ideeas, somehow to reinvent the wheel. Eventually one should try to understand how an indicator its constructed and for that he needs only the formula and somtimes not even that because the plot could give a answer.

I will not make a comment about topics like Gann or Elliot Waves, a beginer should read once about them and after that his brain should tell him if those are useful or not. (i am sorry about those without a brain and for their money).

To learn metastock one only needs metastock help and his brain again.

As u can see my opinion is that to be succesful u need only one thing: BRAIN.    

Just for starters, I strongly recommend all three books by Alexander Elder: Trading for a Living, Come Into My Trading Room and Entries and Exits - read them in that order.  The second book updates and elaborates on the first, but I still recommend reading the first one first, in order to follow his development of methods.  I believe his books helped me straighten out my brain by answering two questions which are much more profound that you'd think at first glance: "What is technical analysis?" and "What is the primary goal of a successful trader?"

Also, read the three Market Wizards interview books by Jack Schwager; there are many thought-provoking, instructive comments and timeless lessons in there, and you'll see how many professionals keep coming back to the basic truths about what's important to succeed.

Except for historical research or TA background, I would avoid any books that have the thesis "My systems and methods will make you rich!" because even if they have worked at some point in the past they're not likely to work now, simply because things change.

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When you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed. - Ayn Rand

Dear all,

I think the idea is very good, but we need to discuss the point where we start. Because someone like me don't know much about Technical Analysis, so I think we need to stat form something simple.I hope we spend more time for this topic, because it very helpul.

Have a nice day for all,
 

I was for myself very important to distinguish the following themes, in order of importancy:

1. trading psychology

2. disciplined trading (trading by a strategy)

3. money management (also position sizing)

4. instrument selection (stocks, option, forex, CFD, futures, etc)

5. exit signals

6. entry signals (this is indeed on the last spot, because it is the least important. That's why it is very strange that it is the main subject of discussions on the internet. 80% of your success in trading is caused by psychology, discipline and money management!).

The books which helped me on these themes are:

1. Mark Douglas - Trading in the Zone

2. John Carter - Mastering the Trade

3. K. van Tharp - Trade your way to Financial Freedom

5 and 6.:

-  Constance Brown - Technical Analysis for the Trading professional

- John Hayden - RSI: The complete Guide

I totally agree with the thing i read on this page, that one's must develop it's own strategy. Only after developing your own, you have the trust in following it in detail and in a disciplined manner. 

Good luck!

Huytq, as I said above, I recommend you read Alex Elder's books as part of your starting-out reading.  From there the sky's the limit; my trading library currently has over 100 books and I've read about 2/3 of them so far with the rest in the queue.

One that I was skeptical about is "Reminiscences of a Stock Operator", which seems to be on everyone's "must read" book list.  I doubted that a book published in 1923 would have much relevance or hold much interest for us "modern" folks.  But I finally picked up my copy and read it.

Conclusion?  Read it.  Read it as soon as you can.

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When you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed. - Ayn Rand

“The Encyclopaedia of Technical market Indicators” by Robert W Colby.

Published by McGraw-Hill. 2^nd Edition About £35-£45 2003. ISBN 0-07-012057-9

A thick heavy book with 820 pages. see his website robertwcolby.com

 

Overview

Colby reviews and tests 127 technical analysis indicators. He used Metastock to produce his results. He concludes that market prices move in trends and price trends persist. The best indicators for profit are Exponential Moving Average & Weighted Moving Average, plus Percentage Hughes AD oscillator with 8 parameters and some others.

Many indicators were worse than buy-and-hold even though some gave very high win rates. Although high win/loss rate is an obsession of novices, Colby favoured high reward/risk ratio (total net profit to maximum equity drawdown).

 

Colby describes how many of the top traders in the world, like Jack D Schwager, use back testing to prove their trading strategies. He mentions Richard Dennis turned $400 into $200M in 16 yrs dealing in the Chicago Futures market. Dennis taught his trading rules to 23 raw trainees whom he called his turtles. 20 out of 23 got average returns of 100% pa.

 

Indicator table

Each indicator is described in detail with the Metastock formula and system testing report (P&L summary stats). Colby trades using purely mechanical signals with no subjectivity, no sophisticated technical analysis and no judgement. He provides a 4 page table to rank the indicators by:

• Versus buy & hold = Overall percentage superiority of the indicator compared with buy-and-hold net profit amount.
• Annual relative advantage (percentage) compared with buy-and-hold.
• L & S % win (Long & short percentage win)
• Short % win  (Short percentage win)
• Average trades per year – results showed huge variation from 0.2 trades pa to 141 trades pa. (Helpful for day traders and long term swing traders to see which indicator best suits their trading style).
• Profit loss index = $ amount of winners to losers. Worst performance is –100. Best is +100; zero when profit equals loss.