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1. Most of what is written in the posts that follow are from three sources. One is the books that I have read, the second is my experience as a trader and the third is my observations of clients’ trades over so many years of my being a market participant. I consider each of these to be invaluable. Be that as it may, we are all still students of the market, the learning process never ceases. Aspiring traders who want to make my hindsight their foresight might find a nugget or two that they can ‘take away’.
1. Most of what is written in the posts that follow are from three sources. One is the books that I have read, the second is my experience as a trader and the third is my observations of clients’ trades over so many years of my being a market participant. I consider each of these to be invaluable. Be that as it may, we are all still students of the market, the learning process never ceases. Aspiring traders who want to make my hindsight their foresight might find a nugget or two that they can ‘take away’.
2. There are many, many books that are worth reading. I will just name a few. This is more from a point of view of giving attribution than anything else. The list is only illustrative, not exhaustive. These are the books I consider as the ‘top reads’:
a. All the books written by Jack Schwager in his Market Wizards series. These books comprise interviews with top traders. His books are special, because they span multiple genres, with the first one written in the late 1980s and the most recent one has been published in 2020.
b. Reminiscences of a Stock Operator by Edwin Lefèvre. This book profiles the life of the legendary Jesse Livermore. It is a true story, but the setting is for the period from 1910 to 1940. Almost everything that is written is still relevant, almost 100 years later.
c. What I Learned from Losing a Million Dollars by Jim Paul and Brendan Moynihan
d. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb.
e. Alpha Trader: The Mindset, Methodology and Mathematics of Professional Trading by Brent Donnelly
3. Under no circumstances should any of these posts be considered as a solicitation to draw investors into a trading mindset. Quite the opposite, in fact.
4. There are two cardinal principles to remember for aspiring traders, and these may sound harsh, but there really is no way out:
(a) the bloodless verdict of the market ALWAYS prevails - the markets will go their own way, with no regard to you or your positions and
(b) those who do not adhere to (a) above will eventually face their ‘Come to Jesus’ moment. Outside of a religious context, and particularly while trading, a ‘Come to Jesus’ moment is one in which we undergo a difficult but positive and powerful realisation or change in character or behavior. Traders who are dogmatic and refuse to change their behaviour, will eventually be 'carted out' of the market. Bull Markets don't 'have to crash' and at the same time bear markets 'can keep falling'. Tops and bottoms in price are all a part of our hindsight, they are not relevant in real-time. As a trader, don't try and reason with the price action - that is a survival strategy.
Click here to go back to The Art of Trading - Index
4. There are two cardinal principles to remember for aspiring traders, and these may sound harsh, but there really is no way out:
(a) the bloodless verdict of the market ALWAYS prevails - the markets will go their own way, with no regard to you or your positions and
(b) those who do not adhere to (a) above will eventually face their ‘Come to Jesus’ moment. Outside of a religious context, and particularly while trading, a ‘Come to Jesus’ moment is one in which we undergo a difficult but positive and powerful realisation or change in character or behavior. Traders who are dogmatic and refuse to change their behaviour, will eventually be 'carted out' of the market. Bull Markets don't 'have to crash' and at the same time bear markets 'can keep falling'. Tops and bottoms in price are all a part of our hindsight, they are not relevant in real-time. As a trader, don't try and reason with the price action - that is a survival strategy.
Click here to go back to The Art of Trading - Index