more trading frauds

B

billyjoerob

Books on trading, I've read too many. One thing I've noticed more and more is that these traders tend not to be actual successful traders. Let's review:

Jonathan Hoenig, Capitalist Pig Guide to Investing

It's well documented that the CP has been losing money for years. Search old threads for this

Harrison, Other Side of WS

This book really surprised me. Harrison was negative during the 2003 bull market and then his investors pulled out, permanently. It appears he lost most of the money he made in the 90s bull market (and his record wasn't so sterling there either, but he happened to be in the right place). Remember, this is a guy who runs a trading site. And he actually gives pretty sound advice, imo. Giving advice and following it are not the same thing.

Pham, The Big Trade

This is a book advising a sort of mechanical momentum strategy. It turns out the strategy worked in the bull market but later wiped the author out in the bear market. My eyeballs nearly fell out when I read that, 2/3s of the way through the book. No problem, publish book anyway.


The lesson here is obvious: there are vanishing few trading gurus. How many of the "Fast Money" traders are decent traders? I'm convinced the worst of the bunch are the Najarians, though I have no evidence.

In any other field, the experts know more than the novices. Only in trading is that not the case. Trading is not a skill, like cooking or tennis. Instead, it's more like dieting: everybody knows what to do. That's not the hard part. The hard part is sticking to the plan.
 
Look successful, dress successful, walk successful, act successful, talk successful no matter how much of your clients money you lost or underperformed last year. It's not actually a Ponzi scheme, but you need new gullible investors every year, because the old investors will only put up with so much of your losing bullshit.
 
I should've titled this "Dr Phils of trading." You don't have to be thin to write a diet book. But even DR Phil probably gives good advice.
 
billyjoerob said:
I should've titled this "Dr Phils of trading." You don't have to be thin to write a diet book. But even DR Phil probably gives good advice.
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next time, do what you "should've" done instead of what you did do. And that is just free advice, you don't even have to buy a book. Lord knows if I had religiously followed that advice I would be much higher on the food chain.
 
Elder's book takes me way back ... I read it around 1995 the year before I started trading full time. I think at the time I wanted to believe it was a good book ... but over time, the longer I traded, I realized it wasn't all that valuable. Haven't picked it up in many years.
 
It is funny, only three books that I have ever recommended were written before 1980 by John Hill 1977/78
http://futurestruth.com/wpftruth/books
and Bible of charting by Magee and Edwards 1948.
http://knowledgebase.mta.org/?fusea...esourceID=13D415EC-EE10-3BCF-3447AE4BADFB8263
I think 99% of what been written since then have limited amount of education. BUT if they give you just a small tidbit that can add to your Trading Plan or gives you are new idea that ends up in your Trading Plan, then it was worth it.

Take for instance Eugene Nofri's book "The Congestion Phase System" 1975, it was written to be a system, but it was designed for trading Wheat on daily bars, so someone will take info making it work for day trading and it might not work for say Crude Oil which is a running market and one that doesn't have much congestive areas. And if one tests it out, doesn't work to what the author said to be 75%. So in one regard one would say book is worthless, but if you read it, you can see where Toby Crabel got his ideas of so many closes in a row and market will do this.
Fred Gehm wrote an article discussing Nofri's book
http://www.mta.org/eweb/docs/Issues/38 - 1991 Fall.pdf

I tend to like to buy books most that are unaware they even written and some almost impossible to find.
http://www.crawfordperspectives.com/comm_stock.html
Or articles not normally read by others
http://www.mta.org/eweb/docs/Issues/65 - 2008.pdf
http://www.stocktables.com/ch/tradingcups.pdf

But who truly has the time to write a book if you are trading? And if you have taken long time to develop a good Trading Plan, who in their right mind would write a book about it? What I often see is first book is informative and then all the ones that come after are worth so much less.
 
billyjoerob said:
Trading is not a skill, like cooking or tennis.
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Do you know how to trade ? If you don't, then your views about trading is not valid. Trading is very much a skill like cooking and tennis. This skill is known to be practised at hedge funds with confirmed results. It is true many of them lose money. Those that consistently make money are proof the skill exists.

Now, why can't internet traders, aka gamblers, duplicate the skill that is blatantly obvious to exist, and often well defined ? They are either stupid or they like gambling too much. The right way to learn trading is not by following other internet gamblers, because their results are unverified, but by following the hedge funds that are proven to make money. Most hedge funds follow some common strategies. The reason they do that is because these are known to work. It's a no brainer that if you do what they do, you get their results.


billyjoerob said:
Instead, it's more like dieting: everybody knows what to do.
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Trading is not like dieting because only the people at hedge funds are proven to know how, while the rest are unproven. So the number of people who know how, and actually make money, are tiny in number. Although the people who try "trading" are large in number, more or less all of them fail because they resort to gambling and don't follow basic rules that make money, as practised by the profitable hedge funds.


billyjoerob said:
The hard part is sticking to the plan.
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If you don't know how to trade, what use is it to stick to a plan ? Trading is rather simple, you just stick to the plan of buying low selling high. Yet, people always buy high and sell low. Is this because they are not sticking to the plan or is it because they simply don't know how to buy low sell high ?


Trading is like cooking and tennis. If someone shows great interest in it and put in years of effort, they can work it all out eventually all by themselves and become a master of the skill. It is also a teachable skill from those who know how to trade. To perfect the skill, it will nevertheless take considerable practice through real trading and years of experience.

To become a good trader is no easier than becoming a good cook or good tennis player. It cannot happen overnight, or after reading a few books.

Unlike cooking or playing tennis, however, there is considerable misinformation in trading in that the financial industry rather you didn't know how to do it. So a lot of books are written, and videos produced that are designed to send you up the wrong garden path, or to drown out sources that offer genuine value. Another thing they do is sending stooges into forums to misguide you. Some forums are even controlled by them more directly with very obvious agendas, where they preach what appears on the surface to be very sound principles but in reality designed to lose you money as quickly and as much as possible.
 
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Of course most books targeting retail traders are garbage. Everything and everyone in this world acts out of self-serving motivation (most all the time at least). Professional books on statistics and probabilities, CS, and finance are written out of academic aspirations and to make money publishing books. Retail trading books are written to make money, only. If any of the advice given there was valuable then the author would have kept it to himself, period. Even if it contained valuable advice it would have been copied and the "opportunity" would have been arbed away in a very short period of time. That is why I do not attach any value whatsoever to trading books in general, particularly trading books geared towards the retail crowd.
 
billyjoerob said:
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The lesson here is obvious: there are vanishing few trading gurus. How many of the "Fast Money" traders are decent traders? I'm convinced the worst of the bunch are the Najarians, though I have no evidence.
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I read that the Najarians' book "How We Trade Options" doesn't even qualify as a decent book for beginners, much less teach the advanced techniques it is claimed to teach. Amazing how often commercials for that pos are aired on CNBC. That's a scam, for sure.
 
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