The first are books I read (or read part of), and when I’m done I put them down and never open them again. They don’t inspire ideas. They don’t contain information that requires reviewing. They don’t provoke me to explore new methods or strategies. These books are a waste of time.
The second group do get me excited about a new indicator, method, or technique. They are written well and with an heir of authority that leads me to explore their ideas further. Unfortunately, the ideas are either over-hyped, misleading, or too difficult to implement. Eventually, these too collect dust. On some level, these are worse than the 1st group since they take up even more of my time. Of course there is always some value in learning what doesn’t work, and at least these books provide me with that.
Unfortunately most trading books I’ve read fall into categories 1 and 2.
The last group are books that I refer to over and over throughout the years. They are sometimes inspirational, sometimes instructional, and sometimes both. I’ve just finished Dr. Steenbarger’s “Daily Trading Coach” and I now have a new book to add to my elite shelf.
Like the Traderfeed blog, it’s completely packed with inspiring information and ideas. Most books have 1 or 2 great ideas in them. This has too many to count. One thing I particularly like is that it is broken up into 101 short “lessons”. Personally, I find long chapters difficult to get through when reading a book. The average lesson is only about 3 pages long – perfect for someone with a short attention span or little time for reading.
It’s basically a mix of psychology, common sense, and actionable ideas to help traders of all kinds improve their trading. One section that may be of particular interest to readers of this blog is the last chapter that serves as an instruction manual on how to use Excel to download and test historical patterns. Dr. Steenbarger provides step by step instructions on building, filtering, and sorting the data to frame market hypotheses. He describes how to use the data to help generate ideas – not to just test already existing ideas. Most readers will find this one chapter contains more valuable information than most books.
With Dr. Brett’s permission, I reproduced the sample spreadsheets he described in Lessons 95 through 99. Anyone who would like to download a copy of the spreadsheets may do so on the main Quantifiable Edges site. You may link to the download page by clicking here.
Of course some of you may be aware that I am one of the bloggers that was interviewed in the book (Lesson 87 – The Power of Research). After reading the book, I can say I’m truly honored to be associated with it in my small way. I’m sure I will be reading and referring back to the Daily Trading Coach over and over throughout the years.
8 comments:
Rob
I am quite curious to know how well excel is used within trading.
Excel has been the tool of my trade for most of my professional life. My niche is building and developing financial information models. However, this has always been to do with income and expenses - usually in large financial institutions in the City of London.
On the other hand I am new to trading...
I read a lot of blogs and see a lot of people looking at charts. I don't trust myself to look at charts however as there is too much room for subjectivity.
However, I do use charts and graphs to try and visualise and work out what the patterns might be - as a first step. Then I model what i think the charts are suggesting.
However, if I want to test profits with various decisions e.g. (i) buy / sell trigger (usually based on three indicators or ratios),(ii) close trade trigger based on indicator (or more than one indicator..), (iii) stop loss (iv) take profit based on price (v) close trade based on time (no. of days). I really need to use vba.
In your experience what proportion of people are (a) using excel (or similar) rather than just charts and (b) what proportion of them are using vba?
I am trying to gauge where my skill set is. Because if it is better than average then I could sell my skills.
Douglas
Douglas,
I think using programs like Tradestation, Blocks, or others is more common than Excel/VBA. Excel has some limitations, but people that are creative with it can do some pretty amazing stuff. Dr. Brett is one example. Another is Michael Stokes of Marketsci. He uses Excel to build very complex models and trading systems.
I use Tradestation more often although I do use Excel for some tests. Dr. Brett's instructions should make it easy enough for almost anyone with basic knowledge of Excel to conduct market studies and test ideas.
Is there a market for coding? Definitely! Lots of people have lots of ideas, but no ability or inclination to figure out how to test them.
BTW, the study you posted a couple of days ago looks quite interesting. Not sure I'd have further suggestions on it, but I haven't had time to look at it in any detail yet, either.
Best,
Rob
Rob,
I ordered the book and started reading it three days ago, and I couldn't agree more with your review.
Thank you for so kindly sharing the Excel sheets with us!
t.
t -
My advice - read it with a highlighter nearby. There's too much that you're going to want to go back and read again that you won't be able to recall it all.
Rob
The daily trading coach is sitting by my bed side every night. It is by far the best trading book i've ever read.
I've read many trading books myself and 90%, as you said, might have one or two good ideas, but not enough for me to keep the book. The daily trading coach is becoming my trading bible. Other books that i would recommend is the one written by Brian Shannon (Alpha trends).
Rob,
Do you have any other recommendations on books to read that are in your third category ?
Thanks
Andrew Palladino.
Rob,
Thanks for the post. I'm wondering if maybe you can comment on a future post about what books are in your elite shelf.
Thank you.
Pablo
I second the previous request for your elite book titles. You don't know me from Adam but I too think of books that way. "sources of power: how people make decisions" is one, "flow" by csiksczentmihalyi is another, and "blink" is a third.
I third that request
Thanks for the post, Rob
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