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Sunday, November 7, 2010

A lazy trader vs a hard working student

I've been a little lazy with the blogging duties lately and there are two reasons for that. First I moved out to a new place which supposes a lot of physical and mental effort lol, and buying stuff for the apartment has demanded lots of hours out of my time. The other reason is that in the last two weeks I have completed reading three books. Yeap, however hard you find it to be true, I have read over 800 pages worth of trading in the last two weeks. I get passionate, which is not always a good thing, and being a lazy trader doesn't mean being a lazy student.

As for the books, the first one I read was "Massive Profits in Penny Stocks" which you can get for free by visiting http://superstarsoftrading.com. It is definitely a must read for penny stocks. I am not a penny stocking guy but you know I like reading as much as possible about trading, and this book can definitely help you understand the world of penny stocks and use the strategies exposed by the author in order to be profitable. And although you may or may not be a penny stocker, this book is for free anyways ;) Don't go naked to the penny stocks war!! You are warned.

The second one was Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders. This is a fascinating real story of a man (Richard Dennis) that was confident that successful trading was teachable. That traders are just not born but they can also be raised. After a bet with his friend William Eckhardt Richard decided to put his own money at risk and teach a handful of students the principles of his personal system and have them trade his money. He called the students "The turtles". The system they used was not revealed for years, and some of the turtles went on to achieve great success.

Written by Curtis Faith, one of the turtle students, it details the system used. The most important thing I learned from this one is that the system is not the main point in being successful, but Money Management is. Position size, risk tolerance, trading psychology, discipline. It's also great at explaining how to design your own system, consequences of over adjusting or curve-fitting a system, meaning of back-testing, statistical significance of the data tested. I don't think it is a good material for beginners as it deals with some complex terminology at times. Also, it is more oriented towards longer term investors. However the lessons exposed are really valuable to any swing trader or day trader out there in general terms, or anybody interested in designing a trading system.

Third one Trend Following: How Great Traders Make Millions in Up or Down Markets, New Expanded Edition. This is another excellent book that analyzes the success of trend following strategies and trend followers money managers over the years. It explores psychological issues to deal with when using trend following strategies. Success stories and disasters, insight into famous money managers' thinking. The book is great at explaining the complexities of "buying high - selling low" as a counter intuitive procedure to trading. Overall, this one is more suited to longer term investors and money managers or individuals with larger assets to trade.

As usual, Investimonials can help you determine if you want to invest some of your time on these readings before you even get started. Go check some reviews.

Have a good one guys!


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2 comments:

  1. could you send me a copy of massive profits in penny stocks please?

    email: trader2704@hotmail.com

    thank you!!!

    ReplyDelete
  2. Thank you for your comment Anonymous.
    Unfortunately, I cant send you a report as I don't trade penny stocks.

    Thanks for reading.
    Good luck!

    ReplyDelete