Learning How To Trade (Bill’s Personal “Learning Curve”)

Partial List Of Bill’s Learning Curve
Tried/Tested/Failed/Winning Techniques & More
To Develop The Perfect Trading System For Bill!

The following list of books, software and other resources represents our reviews of what you’ll see below. They represent our search for a trading system, as well as education, information, research and strategy that would work for us. We do not sell any of the items listed below that are for sale.

Books That Have Helped Our Trading

Trading for a Living, Dr. Alexander Elder. The best basic course on technical analysis. Be sure to get his workbook and tests. Take the tests until you can pass it with a 90% score. His latest book, “Trading Room”, spends more time on trading system approaches.

Lesson Learned: The Basis & Basics of Technical Analysis. GET THIS BOOK! and workbook!

Intelligent Futures Trading and Trading Day to Day: Winning the Zero Sum Game of Trading by Chick Goslin. This is a no-nonsense low key book on momentum investing in the futures market. It is the basis for much of my trading philosophy. Chick has taken a $10,000 account to over $1,000,000 in the past and has been trading for over 30 years.

Lesson Learned: How to set up your own system and develop loaded trades on multiple time frames.

Candle Sticks and Beyond Candle Sticks, by Steve Nison. Highly technical, but because we worked in Japan and Asia and studied Japanese culture, we identified with this technique. This system was used for hundreds of years in the rice trade, long before the wall was even built on Wall Street.

Lesson Learned: Price action is the best indicator of all, but the last to react to chaotic market conditions.

Candlestick Charting Explained, by Gregory L. Morris. A much easier read and also has correlation studies and analysis of candlesticks and Western indicators such as Stochastic, MACD, RSI and Momentum.

Lesson Learned: How to identify turning points or potential turning points in the market.

Trading Chaos and New Trading Dimensions by Bill Williams. A complete explanation of chaos theory and the underlying order of random markets.

Lesson Learned: How to interpret price action, volume effects, acceleration and momentum on prices.

The Master Swing Trader, By Mark Farley. An excellent book on short-term trading techniques and what he calls the “7 Bells” that alert you to loaded trades.

Lesson Learned: How to identify and trade high potential trades and the key Times of the Day for market timing.

Day Trader, Jake Bernstein. Excellent explanation for day traders and signal ideas. Helped confirm my developing system.

Lesson Learned: You can develop a consistent entry and exit system just from technical indicators.

Trading as a Business, Charlie F. Wright. Written for Trade Station owners on system writing and testing. Excellent outline of how to set up Trade Station systems and optimize them.

Lesson Learned: How to treat trading as a business and include all of my expanses into the equation.

Guide to Trading Systems by Bruce Babcock.Guide to Trading Systems by Bruce Babcock. This book, while dated, gives an excellent analysis of the various trading system position sizing techniques for both winning and losing streaks, as well as identifies strategies to minimize draw-downs

Lesson Learned: It is the money management that determines your long term success or failure as a trader.

The Trading Game by Ryan Jones. An excellent book on optimum position sizing. Sometimes difficult to put together, but excellent explanations of how and why various money management strategies work or fail.

Lesson Learned: It is the money management that determines your long term success or failure as a trader.

Day Trade Futures Online
by Larry Williams. We think this might be Larry’s best book, because it has excellent information on trade positions and trading size. He basically disagrees with the previous two authors. You decide what is right for you.

Lesson Learned: There are as many approaches to the market as there are traders.

TeleChart Software by Worden Brothers. Excellent software that is FREE. You pay only for the data feed. The Worden Brothers have been around for over 50 years in the data business and have several excellent proprietary indicators (Time Segmented Volume, Money Stream and Balance of Power) that will make YOU money consistently.

Lesson Learned: The notes and contributions by users are also excellent. We used this system for our position trades and to scan for stocks with the proper setups until we switched to futures.

Software That Has Helped My Trading Successes

EnsignSoftware.com and eSignal.com Software. We used this software for our day trading system on the S&P futures markets. Top of the line with many indicators not availiable on other chartng programs.

Lesson Learned: You can always need a backup data feed and second access to your broker.

INO.com and Briefing.com. Both give excellent information on upcoming economic reports that can affect your day trading.

Lesson Learned: You must know what major reports are coming out during the trading day.

Our broker was ATC Brokers in Glendale, CA (1.877.654.8400). They charge roughly $5-$6 flat fee round turn and non-commissioned brokers. We have had no complaints or problems here.

Getting Your Head In The Right Place

Trade Your Way to Financial Freedom by Van K. Tharp: This book talks about positive expectancy, entries and exits, as well as the Neuro Linguistic Programming Techniques to use in trading or any high-performance activity we suggest that YOU play Van’s trading game to test what YOU have learned from the book. His Newest Book Super Trade is GREAT Investment.

Lesson Learned: You do not to have to be right to make money, that expectancy ratios, position size and opportunity to trade determine your financial success, not entry signals.

Trade Your Way to Financial FreedomTrading in the Zone by Mark Douglas. Excellent book about the mind of the trader and winning and losing.

Lesson Learned: You need to be read every few months to keep your head in the right place.

Blink by Malcom Gladwell GET THIS BOOK!

It’s a book about rapid cognition, about the kind of thinking that happens in a blink of an eye. When you meet someone for the first time, or walk into a house you are thinking of buying, or read the first few sentences of a book, your mind takes about two seconds to jump to a series of conclusions. Well, “Blink” is a book about those two seconds, because I think those instant conclusions that we reach are really powerful and really important and, occasionally, really good

Lesson Learned: Teaches you how to use your subconscious mind to recognize in the blink of an eye, whether you should be long, short or out of any market. This is how that 90% of “unused” portion of your brain works.

Against the Gods by Peter Bernstein. A book about risk, probability and game theory.

Lesson Learned: Gives you a whole new perspective on trading risk and reward scenarios.

Change Your Mind & Keep the Change by Richard Bandler and John Grinder. “Frogs into Princes” is another excellent choice.

Lesson Learned: The best book on NLP techniques for changing your mental programming.

The New Trader’s Tax Solution by Ted Tesser. This book contains all the Tax Strategies you will need to qualify for Trader Status.

The Tax Guide for Traders by Robert Green of the Green Company.com

What We Found That DID NOT HELP Us

The following list is of highly promoted items that were NOT really effective in developing our trading system:

Seasonal Trades and Seasonality by Jake Bernstein. This was a A tape and book series showing highly correlated dates to trade commodities. Found the system to be not tradable in any meaningful way.

Ken Roberts 1-2-3 System: “The Guy In The Cowboy Hat.” Lost big time on several attempted trades with this system. We found it too subjective for our taste.

All of the Wade Cook books: Basic and simplistic, with not much substance.

Lesson Learned: that Wade Cook used Worden Brothers TeleChart 2000 in his stock scans so there is no need to spend $300 per month on his WINS data feed.

The Money Tree & Batting 800, Larry Williams. We were able to talk with Larry at any time, but could not to figure out his system in any way that gave us confidence. Somehow placing a trade based on total past performance that could not be effectively tested without Trade Station (a $2500 investment) left us queasy. Also, the longer-term trades with greater draw-downs left us uneasy.

Lesson Learned: Position Sizing that lead me to Bruce Babcock and Ryan Jones books.

We purchased MetaStock and went through numerous upgrades and data feeds in a attempt to test some of these systems. After spending thousands of dollars trying to program in systems that were consistent. We even purchased their latest trading system.

Lesson Learned: Testing these programs and sent them back because they failed to produce consistent results.

OmniTrader: Another great sounding idea, but one that we lost money with. Every setting gave different signals for the same stock or commodity. After six months of really trying, we sent this program back for a full refund too. We did make one lucky hit on RNWK from 19 – 63 in a week, but no others after that.

Lesson Learned: Not to rely on an overly complex system with too many indicators.

Indigo Software: Highly promoted, sounded great, but again another black box. Finally passed this one off to others, too. We only paper traded this system during 1999-2000 and found the system slow to react to market conditions and it did not explain what it was doing. Sold it back after three months.

Lesson Learned: We did discover that we wanted to be in control of my trading and that we really liked technical analysis.

The Elliotician Software. While we admit to using the Elliott Wave concept in our current trading, we found this program difficult to use, and a memory hog. There are easier ways to use this technique.

Investors Business Daily, How To Make Money in Stocks and Guide to High Performance Investing by William J. O’Neil. We are torn on this one. We subscribed to IBD for four years and learned a lot about the investment world, but this is all basically fundamental analysis and how to pick stocks on fundamentals. We used many of the IBD ideas on TC2000. Other software did only marginally well. As we drifted more toward shorter time frames to reduce risk, the IBD information became less important to our trading.

The W. D. Gann Method of Trading by Gerald Marisch. Okay, everyone tries to understand Gann and we are no exception. Try is the right term! This is more complicated than it needs to be and there are other simpler indicators that can be used to accomplish the same thing.