Final Top 10 Forex Literature Covered in 2017.

Finally, this remarkable woman has some interesting stories. Those that keep you glued to your screen, you can’t catch a break. Kathy Lien in her book Millionaire Traders, How Everyday People are Beating Wall Street at its own Game will give you valuable lessons you can employ in your trading journey. This is a very good read for new traders. It emphasizes that there’s no one rule of thumb when it comes to trading. You are the Holy Grail, stop hunting for one. Kathy Lien was featured in a trading documentary, Million Dollar Traders a while back, I suggest you go look out for that. She and her trading partner Borris Schlossberg manage an asset fund management company for several years now. So when she tells you of successful stories of traders she has interacted with over her trading career, listen up. She covers the basics, the art of trading, getting started in trading before she cites real life examples. This book is definitely worth your time. In conclusion, she outlines six real truths in trading that you should be aware of when starting out; be well capitalized, expect to lose for at least six months, test before you try, always use stops, trade to your personality and have the right tools to trade i.e. an analytical mind and the correct platforms.

Another book I can literally read over and over again is Trading For a Living by Alexander Elder. He takes us through what it takes to trade successfully, why psychology is key and why you seriously need to evaluate your broker. Elder says, “The trading industry kills traders with commissions and slippage. Most amateurs cannot believe this, just as medieval peasants could not believe that tiny invisible germs could kill them. If you ignore slippage and deal with a broker who charges high commissions, you are acting like a peasant who drinks from a communal pool during a cholera epidemic. You pay commissions for entering and exiting trades. Slippage is the difference between the price at which you place your order and the price at which it gets filled. When you place a limit order, it is filled at your price or not at all. When you feel eager to enter or exit the market and give a market order, it is often filled at a worse price than prevailed when you placed it. The trading industry keeps draining huge amounts of money from the markets. Exchanges, regulators, brokers, and advisors live off the markets while generations of traders keep washing out. Markets need a fresh supply of losers just as builders of the ancient pyramids of Egypt needed a fresh supply of slaves. Losers bring money into the markets, which is necessary for the prosperity of the trading industry”. I will have a webinar up before the end of the year on brokers. Be on the lookout.

Technical Analysis-The Complete Resource for Financial Market Technicians by Charles Kirkpatrick & Julie is one of the bibles of Technical Analysis actually recommended by a CMT pal of mine. The book has everything you need to know on price, chart patterns, indicators and why you don’t need a million of them to trade right, risk management and taking profits, market cycles, statistics, what investors look for just to name but a few. Especially when you need to recover from a bad trading week or month, treat yourself to this book. It’s a treasure hunt, for real. I like how he elaborates the need to test out a trading system with regard to money management. He says, “There has never been a system that was 100% profitable, that never took a loss on any trade or investment. Although such a system is the ideal, it has never been achieved despite the brilliant minds, sophisticated mathematics and theories, and superfast computer abilities that have addressed methods of investment. It likely never will be achieved. The search for such a perfect strategy can become an obsession but is genuinely futile, and losses are, therefore, inevitable in investing and trading. Ruin is also very likely. Every day some traders and investors are wiped out, largely because they did not utilize a portfolio method that included an assessment and control of risk. The area between perfection and ruin is a compromise between the gains and losses, known more commonly as “rewards and risks,” of a system or portfolio strategy. As can be imagined, the possibilities between perfection and ruin are limitless and have much to do with personal preference for risk. The reward side of a strategy we can fairly well quantify, as was shown in the previous chapter on systems, but the risk side is not so easily understood. The trade-off between the two will affect the ultimate success or failure of a portfolio strategy. That is the essence of money management—to maximize return at minimum risk. No home runs, no Holy Grails, no perpetual money machines—just plain and simple, consistent profits with minimum chance of losing all of one’s capital”.

Going back to the basics because it’s necessary especially with the advent of Bitcoin as a digital currency, you need to read Manias, Panics & Crashes- A History of Financial Crisis by Robert Aliber. Some have called it a bubble, some are calling it mania, there is all sorts of news and entertainment, trading “gurus” commentating on Bitcoin, you’d think they had a sat down with Satoshi Nakamoto. Wherever your stand is, you need to know what leads to crashes before you open your mouth or type something for the world to read. Even though the financial crisis was majorly started in the real estate industry, the derivative is just an asset. The concepts are the same. Some have argued that Bitcoin is not a value producing asset and is thus only a speculative tool digital currency, while some have advocated for its use and foreseeable future even with minimal regulation. Quoting Robert Aliber, “The financial crises that are analyzed in this book are major both in size and in effect and most are international because they involve several different countries either at the same time or in a causal sequential way. The term ‘bubble’ is a generic term for the increases in asset prices in the mania phase of the cycle. Recently, real estate bubbles and stock price bubbles have occurred at more or less the same time in Japan and in some of the Asian countries. The sharp increases in the prices of gold and silver in the late 1970s have been tagged as a bubble, but the increases in the price of crude petroleum in the same years were not; the distinction is that many of the buyers of gold and silver in that tumultuous and inflationary decade anticipated that the prices of both precious metals would continue to increase and that profits could be made from buying and holding these commodities for relatively short periods. Grab a book and enjoy the ride!