Hi! With on-going containment, that may come back a few times in the next year or so, I thought I would recommend some good books to read. This blog will not teach you everything you need to know!
Let’s be clear, there are many good books out there but authors usually make their living out of selling books rather than trading, justification always being having more regular revenues… or just revenues? 😉
Anyway, most books do not cover more than basics, giving only very basic information about RSI, stochastic, … Hidden divergences are almost never covered, not talking changing default parameters!
So here are a few good books with in-depth reliable information.
First one will teach you the basics. Dr Elder is quite good about explaining how to do trading and provides very advanced trading strategy. His 3 steps screening strategy is brilliant.
If you are looking at creating your own indicators, Larry Williams shows his creativity. The indicators he developed may or may not work any more, but he finds the words to kick-start imagination.
Pitchforks and Action-Reaction are the ONLY tools I know of that allow easy and reliable prediction of where prices are going and when. Don’t get me wrong, these are not crystal balls, they allow knowledge of potential targets, one or more of them are very often hit by the market. P. Mikula provides a very good starting knowledge on Andrew’s pitchforks and action-reaction. He doesn’t say how to select the pivots points however but as A. Andrew supposedly said, each 3-points sets have a story to tell. This will lead you to sound meditation for sure!
Even if we are not doing trend trading the way described in this book, M. Covel is a fantastic writer who explains in detail the automated systematic trading, explains what it is to have an edge in the market, how to demonstrate it. Your challenge is to do better than trend followers, which you can possibly do after thinking deeply with book just above.
Fractals are a way to trade with the trend, represented by an Alligator in Bill Williams book. Providing you spent some time understanding his concept, fractal trading is a very good trading system. We are missing statistics but the programming should be easy.
‘Trading with the odds’ was the first book I read that took a deep dive into the probabilistic side of trading. C. Kase explains it all in simple terms, the weekly synthetic bars are a must-have trading tool. Kase Peak Oscillator is also fascinating in its concept.
Last book, bot not least, is not about trading per se but it is a must-read. Nassim Taleb makes the case about luck: even W. Buffet may have been lucky because probability of having someone so successful at trading among billions of humans is not zero! And handling of randomness in trading precisely the core of the system!
That’s all folks. Enjoy these books and trade safely.
