Rob Booker recommends you what Trading Books you should read
Expert: Rob Booker, Independent Currency Trader of www.Robbooker.com
Topics that will be covered for above session are:
- How to pick books that will help you?
- How many strategies do you need?
- The 10 best books on trading and how they can help you now
Who is Rob Booker?
Rob Booker is an active proprietary trader, money manager and forex educator. Mr. Booker has trained hundreds of forex traders around the world, assisting them with developing their own trading systems, but more importantly, Mr. Booker focuses on helping traders deal with the mental, psychological, and discipline issues related to trading. Mr. Booker has authored Strategy:10, one of the most popular electronic books on currency trading, which has been downloaded over 100,000 times. He has also written The Currency Trader's Handbook, to be released in early 2006. Mr. Booker avidly employs technical analysis in his search for trading opportunities.
You’ll notice there are only three “system” books listed here. Only two books that will teach you strategies for trading. The rest focus on the mental side of trading. Trading is way more than 70% mental. It is nearly 100% mental. The system you use is irrelevant. The mental discipline with which you test your system, and build it, and implement it – that is everything.
Books #1-3: The Market Wizards Series by Jack Schwager. If you don’t read anything else, read the interview with Paul Tudor Jones in the first book. If you read something after that, read the interview with Stan Druckenmiller in the second book. And if you read something after that, read the interview with Mark Cook in the third book.
And you should read all the other interviews too. You will learn that even the greatest traders in the world have had serious, emotionally damaging losses. They lost huge amounts of money at the beginning. But they did not give up, and they learned that disciplined money management made all the difference.
Are you going to learn any trading systems from these books? Absolutely not! You are going to learn how important it is to protect your account. How critical it is to test your strategies before you trade them. And how you have to be emotionally strong to survive. These are arguably the best trading books you can read.
Book #4: Reminiscences of a Stock Operator by Edwin Lefèvre. This is the story of Jesse Livermore – one of the greatest speculators the world has ever seen. He earned and lost huge sums of money time and time again. Some of the most important advice you’ve ever heard about money management originated with this book. You’ll read about the importance of standing by your decisions, and also the wisdom in getting out of positions quickly when you know you are wrong. You will see how terrible it can be for you to mismanage your money, without losing any of your own. And though written in the 1920’s, the book reads like a thriller. Well, if you are a trader it reads like a thriller. I read it in one sitting and could not put it down, and I periodically pick it back up and read a few pages.
Traders who blow up their accounts are the types of individuals who never spend any time remembering how dangerous trading can be. They start to feel invincible and then they overleverage their account and then they explode. You can see this happen more than once in this book, and the lesson is worth reading over and over.
Book #5: Ugly Americans by Ben Mezrich. I love this book! Not a single trading strategy in it, but worth 5 times the price. This is the story of a Princeton graduate, a former football player, who after college has no job offers. So he goes to interview on Wall Street and can’t get hired. And when he is ready to give up, he gets a job offer from a Princeton football fan (and alumnus) in Japan. Without even knowing what he is getting into, he jumps on a plane to Japan and starts an amazing adventure as a hedge fund trader.
This book will teach you that you don’t have to be a rocket scientist to trade. You don’t have to be a math genius, or have super connections. You just need to have discipline. You’ll notice in this book that there isn’t a lot of room for error in a hedge fund – these guys play to win. The story of Malcom the football player turned hedge fund superstar will make your head spin. And teach you how important it is to prepare for your trades: he makes $500 million on one trade that he researches for months.
Book #6: Day Trading the Currency Market by Kathy Lien. This is the most important book ever written about the currency market. There are other books that propose to be an overview of the market, but they suck in comparison. This is the only “overview” book you need. And yes, it does even have trading systems – good ones – described in detail. Kathy is the queen of retail currency trading, and it’s obvious why in this book.
This book has an excellent description of the driving economic forces behind the currency market – and I don’t think you can find the same, reliable information in any other place, let alone in a book.
Book #7: Technical Analysis of the Currency Market by Boris Schlossberg. Boris is a fundamental trader but he wrote a book about technical analysis. Go figure. He’s not only a friend but he is a good trader and a world-class currency analyst. The discussions of systems in this book makes it worth the cover price. He has a unique way of setting stop losses that is the best discussion of the subject that I have ever read. Because it focuses on the currency market, I find it more valuable than other books on technical analysis.
Book #8: Trading in the Zone by Mark Douglas. This is the best book on the mental side of trading ever written. Period. If you’ve not read this book, you’re missing out. It has served as a wake up call to many traders and has been an instrumental difference in their success. I have bought at least 200 copies for friends over the last few years. Probably more. If you are struggling with discipline, or you are jumping between trading systems, I hope you’ll read this book.
Book #9: When Genius Failed, by Roger Lowenstein. Have you ever thought that you needed to work on Wall Street, or have an Ivy League education, in order to trade? That the Wall Street traders have an advantage over you? This book will put those myths to rest, as you read about Nobel Prize winners and Wall Street veterans and their success in blowing up a $5 Billion hedge fund and nearly sending the entire world financial system into chaos. Think about it: some of the most respected minds on the planet didn’t just act so stupidly that they blew up their own fund – they almost blew up major Wall Street brokerage houses in the process. Genius doesn’t make you profits. Good money management and discipline do.
Book #10: Liar’s Poker by Michael Lewis. One of the most entertaining books about Wall Street ever written. The descriptions of the outsized personalities, his experiences on the trading floor at Salomon Brothers, his storytelling of the explosion in bond trading in the 1980s – all combine to make a quick read, and good lessons about risk that you can incorporate into your own trading career.
FXstreet Moderator (Jun 14, 2006 9:28:46 AM)
Good morning, good afternoon, and good evening to all of you joining us today from different parts of the world. Welcome to today's Live Forex Expert Question and Answers session.
FXstreet Moderator (Jun 14, 2006 9:38:52 AM)
Meanwhile we recommend you to read the speech material that you can find on your left window.
FXstreet Moderator (Jun 14, 2006 9:46:24 AM)
Today expert is Rob Booker, Independent Currency Trader of www.Robbooker.com. Please prepare any questions you may have for the expert.
FXstreet Moderator (Jun 14, 2006 9:50:14 AM)
Thank you for joining today’s Q&A Session.
FXstreet Moderator (Jun 14, 2006 9:53:46 AM)
Welcome to the Session. Today I am delighted to welcome our guest speaker Rob Booker, Independent Currency Trader of www.Robbooker.com
Rob Booker (Jun 14, 2006 9:54:46 AM)
Thanks for joining me today!
Rob Booker (Jun 14, 2006 9:56:07 AM)
I am going to start off by answering some of the questions that were submitted before today's chat. I just received the questions, so I will need to take some time to answer them and post them. I am sorry for any delay this causes.
Rob Booker (Jun 14, 2006 9:56:20 AM)
First Question: i would like to know... the books u recomoned are based on which theam ? T.A , Psychological, or anything.
Rob Booker (Jun 14, 2006 9:56:51 AM)
Answer: Mostly psychology. I am convinced that you do not need to read more books about technical analysis or systems. You need to read more books about keeping your feet on the ground and keeping your account balance safe.
Rob Booker (Jun 14, 2006 9:57:19 AM)
Second Question: How do you stay focused on one system and not be influenced by "check out this indicator"?
Rob Booker (Jun 14, 2006 9:59:02 AM)
Answer: It's really hard! You have to simply block it out. You cannot drive a car with 10 steering wheels. You cannot trade a currency pair with 10 systems. The major problem I see with most new traders is that they keep adding indicators to their charts, until their charts are a freaking mess.
Rob Booker (Jun 14, 2006 9:59:20 AM)
Third Question: What FX trading opportunities will there be in the second half of 2006?
Rob Booker (Jun 14, 2006 9:59:23 AM)
Answer: Long and Short.
Rob Booker (Jun 14, 2006 9:59:46 AM)
Fourth Question: I have heard of a book titled "Trading in the Zone". I checked on line and there are two books by different authors. Which one should I read if any?
Rob Booker (Jun 14, 2006 9:59:55 AM)
Answer: The one by Mark Douglas.
Rob Booker (Jun 14, 2006 10:00:35 AM)
Fifth Question: Is there a good definitive book that shows chart patterns, how to identify them, and what the associated stratigies there are to use them to include entry, exit, and pip expectations?
Rob Booker (Jun 14, 2006 10:01:07 AM)
Answer: Martin Pring has a great book entitled "Pring on Price Patterns." You might want to check that one out.
Rob Booker (Jun 14, 2006 10:01:59 AM)
Sixth Question: i have been trading from last four months now and continuously loosing money .i am facing a biggest problem of where to exactly enter the market and where to exit .
Rob Booker (Jun 14, 2006 10:02:58 AM)
Answer: Stop trading real money! If you are trading a live account, you must stop trading right now and not continue. You will destroy your accounts. You will lose everything. You have to stop trading and only start trading again when you are able to trade consistently profitable for at least 3-4 months on a demo account. You have to back up everything and test a strategy.
Rob Booker (Jun 14, 2006 10:03:35 AM)
Seventh Question: I like 10 pips. 10 pips is a good days work. How may lots shoud I trade on an account with about $10,000 margin in it ??
Rob Booker (Jun 14, 2006 10:04:13 AM)
Answer: I would suggest trading as little as possible for the first month. Maybe as little as 1 mini lot. Get consistent. Make sure you are consistently making money and never losing very much. Then add 1 more lot each week you continue to follow your set system.
Rob Booker (Jun 14, 2006 10:04:43 AM)
Question 8: What do you think of Steve Nison´s book "Japanese Candlestick Charting Techniques" 2nd edition. Do you think it is worth the hundred bucks retail sticker price. (I would pay twice that now that I use it all the time) love and kisses MrWhipple
Rob Booker (Jun 14, 2006 10:05:30 AM)
Answer: Mr. Whipple -- it is a good book. It's only important for people who want to use candle patterns. It is not necessary to use candle patterns in trading, but if it is a big part of one's strategy, this is the best book.
Rob Booker (Jun 14, 2006 10:06:17 AM)
Question 9: hello Sir, I have with me contracts from 50B+ for USD/EUR, that we have received form a client, I do not know if this is real or not, can a contract be of this size? we are very new on this type of transaction and we do not want to get involved with nonsence transaction, can you help, please!
Rob Booker (Jun 14, 2006 10:06:24 AM)
Rob Booker (Jun 14, 2006 10:06:41 AM)
You might send me an email email@example.com about that one.
Rob Booker (Jun 14, 2006 10:06:51 AM)
I can certainly take care of $50 Billion for you.
Rob Booker (Jun 14, 2006 10:07:15 AM)
Question 10: I trade currencies only on the basis of fundamentals, do I need to be technical also.
Rob Booker (Jun 14, 2006 10:07:42 AM)
Answer: No. You don't NEED both. Do what works for you and ignore people who tell you that you MUST do something.
Rob Booker (Jun 14, 2006 10:08:06 AM)
Question 11: How do you keep from being overwhelmed by the information overload that comes from reading multiple books on trading? Given that there are multiple valid approaches to trading, authors will inevitably contradict each other. Another way to ask the question is: How do you go from aborbing the ideas to making them your own?
Rob Booker (Jun 14, 2006 10:08:36 AM)
Answer: It is really difficult. I read books about trading stories. That is how I keep on target. I love the stories. Books about systems are almost a waste of time.
Rob Booker (Jun 14, 2006 10:09:18 AM)
Question 12: Have you ever met a trader by the name of Ferdinand F. Pipworth?
Rob Booker (Jun 14, 2006 10:09:57 AM)
Answer: Yes. First cousin to J. P. BreadTangle, the creator of the BreadTangle candle formation.
Rob Booker (Jun 14, 2006 10:10:16 AM)
That's all for the questions you submitted before the chat. I'm happy to answer any other questions as well.
FXstreet Moderator (Jun 14, 2006 10:13:25 AM)
NOW, the expert will answer all live Questions sent to the FXstreet Moderator during the course of the session.
GOLDEN (Jun 14, 2006 10:13:33 AM)
I have been told that to be consistent in trading you have to be incredible at reading charts specifically candle stick charts wharts you view on this
Rob Booker (Jun 14, 2006 10:14:24 AM)
Answer: Don't ever listen to anyone who tells you that you MUST do this or that. There are billionaire traders who do not watch the charts. There are billionaire traders who only watch charts. Some traders don't even use candles. They use bars or point and figure charts. What you choose to focus on is unimportant. That you focus means everything.
Mike (Jun 14, 2006 10:15:20 AM)
rob, it seems to me from your book selection that you're saying that principle is more important that "systems" that change depending on market conditions, can you comment if I'm hearing you right? Except for pregnant fairy systems that is!!
Rob Booker (Jun 14, 2006 10:15:41 AM)
Answer: Right. That is absolutely true. Systems come and go. But disciplined traders do well forever.
Adem (Jun 14, 2006 10:24:37 AM)
What is the order to recomend read them books. First Tecnical or Mental?
Rob Booker (Jun 14, 2006 10:25:00 AM)
Answer: I would say for every technical book you ready, read at least 2 books on the mental/psychological side of trading.
FXstreet Moderator (Jun 14, 2006 10:26:54 AM)
I wonder your recommends for a very very fresh starter, will it be fine to read for a while or directly start in the feel the market?
Rob Booker (Jun 14, 2006 10:27:43 AM)
Answer: I think starting your trading on a demo account right away is just fine. You wan to be able to learn how to set stops, limits, make trades, etc.
BIGBLACKFEET (Jun 14, 2006 10:28:08 AM)
In your own publisher book : "The Currency Trader's Handbook" do you present your different trading systems ? all of them ? or do you ONLY present psycholgy stuff ?
Rob Booker (Jun 14, 2006 10:28:29 AM)
Answer: I present one system that I have used, but not all of the systems. It is mostly about the psychological side of trading.
FXstreet Moderator (Jun 14, 2006 10:30:01 AM)
new trend start after the news is released, is there a book on how to trade the news, and also on how to trade breakout?
Rob Booker (Jun 14, 2006 10:30:42 AM)
Answer: kathy Lien's book has some great information on trading the news. i highly recommend that you read that.
buba (Jun 14, 2006 10:31:50 AM)
I read Kathy's book. Each morning she created checklist and this check include more than 10 parameters Stoch, RSI, ADX and so for. From other side you are saying don't add indicators to the charts? I'm confuse.
Rob Booker (Jun 14, 2006 10:32:51 AM)
Answer: What Kathy does is great for Kathy. YOU have to decide what is best for you. And if you decide that that same checklist works for you, then excellent! But you have to test it for yourself. I have found that long lists of indicators do not work for me.
BIGBLACKFEET (Jun 14, 2006 10:35:08 AM)
Do you know and if yes what do you think of Bukowsky Thomas 's "encyclopedia of chart pattern" , please ?
Rob Booker (Jun 14, 2006 10:35:45 AM)
Answer: I do know that book. It is good one.
avi (Jun 14, 2006 10:38:16 AM)
where can i find some good trading strategy, i don't like heavy books, can you refer me to web site with this info?
Rob Booker (Jun 14, 2006 10:38:43 AM)
I will be ready to answer in 2 minutes.
Rob Booker (Jun 14, 2006 10:41:08 AM)
Answer: That was a very good question. i just got a phone call so my answer was delayed. Here is my answer:
Rob Booker (Jun 14, 2006 10:42:06 AM)
If you are looking for a book that is not that deep, not that hard to understand, and it is about trading strategy, you are out of luck. Most trading books about strategy are boring and long winded. Kathy's book is really good and so is Boris's -- so I strongly suggest you start there.
s (Jun 14, 2006 10:43:16 AM)
Hi, Can you tell me ,which book would be worth buying for a forex beginner
Rob Booker (Jun 14, 2006 10:43:38 AM)
Answer: I strongly recommend the first book in the Market Wizards series. Then if you are going to start trading currency, you might next read Kathy Lien's book. Or my book (The Currency Trader's Handbook).
akk (Jun 14, 2006 10:44:33 AM)
What is your opinion on Expert Advisers, do they really work on MACD and MA crossovers as claimed
Rob Booker (Jun 14, 2006 10:44:54 AM)
Answer: I am sorry that I do not have information on how those work. I know you are using Metatrader - and some of their EA's are rumored to work very well.
s (Jun 14, 2006 10:48:04 AM)
I want to understand the technicals for forex trading. Which would be the best training provider
Rob Booker (Jun 14, 2006 10:48:29 AM)
Answer: I am not here to sell you anything but I do training on technical and fundamental trading. I woudl be happy to talk with you.
FXstreet Moderator (Jun 14, 2006 10:59:25 AM)
Do you think volume has a place in forex trading? if so there are any methods you have tried?
Rob Booker (Jun 14, 2006 10:59:32 AM)
Answer: Volume does not exist in FX. Or, at least, not in the way that it does in equities / share trading. Volume in equities is possible to measure because there are central exchanges through which trades pass. In fx, there is no central exchange -- thousands and thousands of traders are matched up on lots of different systems (banks even trade directly with one another) and no one can measure that volume in real time. So, instead, about every 6 months a report is released that attempts to measure total daily turnover/volume ... but that is obviously very delayed. When you do see a volume indicator in fx charts, it's actually a measurement of quotes given per X, where X is the time frame of chart you are watching. So if volume is 200 on a 15 min chart, that means that 200 quotes have been given for the currency pair you're watching in the last 15 minutes.
FXstreet Moderator (Jun 14, 2006 11:00:11 AM)
Which two pairs are best correlated?
Rob Booker (Jun 14, 2006 11:00:14 AM)
Answer: Probably the GBPUSD and the USDCHF or EURUSD.
fxspcul8r (Jun 14, 2006 11:01:18 AM)
What are you thoughts on Victor Niederhoffer's phiolosphies? He comes down pretty hard on T/A and trend following, calls them a con. Then goes on to say that cycles are important (which are a form of t/a). He seems to back everything up with statistics, regregression alanlysis etc.
Rob Booker (Jun 14, 2006 11:01:47 AM)
Answer: I think it's ok to follow Victor Von Doom from the Fantastic 4, as long as YOU personally test the strategy. You should never trade anything before you test it for yourself.
aboki (Jun 14, 2006 11:03:16 AM)
Do you suggest attaining a specific average monthly pip gain before trading with real money? 200,400?
Rob Booker (Jun 14, 2006 11:04:21 AM)
I think you need to be able to end at least 4 weeks with positive pips each week and no drawdown more than 100 pips. End each week at least with 30-50 pips of profit and no drawdown more than 100 pips. And then trade live for less than $1 per pip. This is the most aggressive I can suggest.
GOLDEN (Jun 14, 2006 11:05:15 AM)
you mentioned, that using candle sticks isn't neccessary do you me using charts in general ?
Rob Booker (Jun 14, 2006 11:05:45 AM)
Answer: Once again, nothing is necessary unless you test that it works for you. This is sooooo important. You have to test stuff. You have to find out if it works for you. For me, charts are very important.
poo (Jun 14, 2006 11:06:21 AM)
Which book do u always refer to and will always read again to get you on track when things do not go well?
Rob Booker (Jun 14, 2006 11:06:40 AM)
Answer: The first book in the Market Wizards series.
aboki (Jun 14, 2006 11:07:29 AM)
Do you allot a maximum pip loss per trade or is it always variable dependent on risk/reward?
Rob Booker (Jun 14, 2006 11:08:12 AM)
Answer: I don't think you should ever risk more than 1% on a trade or set of trades until you have a tested system that you know can withstand bigger drawdowns. After you do your testing you will know if you can take a 3% or 10% drawdown and be ok.
daniel (Jun 14, 2006 11:08:36 AM)
what does your book cover, systems, fundamental, mentality?
Rob Booker (Jun 14, 2006 11:09:16 AM)
Answer: The Currency Trader's Handbook is about the psychology of trading. In Jan-Feb 2007, my book from John Wiley & Sons, "Adventures of a Currency Trader" will be released and it will have a bit of systems and psychology.
profesorul (Jun 14, 2006 11:09:47 AM)
Could you indicate what should be (in your view) a reasonable timeframe for testing a strategy before trading it live? Could 3 months be enough to indicate future consistant profits? Thank you!
Rob Booker (Jun 14, 2006 11:10:11 AM)
Answer: At least 100 trades. Ideally, 300 trades. If that takes 1 month, that's fine. 2 weeks,. that's fine. The testing is what matters.
plcdoc (Jun 14, 2006 11:10:33 AM)
I've read all the books and still do a fantastic job of losing money. Should I find a mentor/coach? or, a bankruptcy lawyer?
Rob Booker (Jun 14, 2006 11:11:12 AM)
Answer: I have said it today before -- books do not help you win. You help you win. Send me an email and we can talk about it. But you need to focus on one system. You need to delete most indicators from your charts. You need to make sure that you have tested your system before you trade it live.
ed (Jun 14, 2006 11:12:12 AM)
What are the most important traits of a "disciplined trader"?
Rob Booker (Jun 14, 2006 11:12:53 AM)
Answer: A disciplined trader never risks more than 1% of his account when he is starting out. Always tests 100 trades at a minimum before trading live. Focuses on 1 strategy at a time.
GOLDEN (Jun 14, 2006 11:13:37 AM)
Rob being new to FX trading, can you give me ideas as to what else to use to tade with as appose to just charts ?
Rob Booker (Jun 14, 2006 11:14:05 AM)
Answer: You can do some research on how interest rates drive currency values. Then you could take some really long term trades. That is one idea.
plcdoc (Jun 14, 2006 11:14:56 AM)
Are there any "mental conditioning" products that you recommend?
Rob Booker (Jun 14, 2006 11:15:46 AM)
Answer: That is an excellent question. There is no product out there right now, but you might consider the following: eating right (lots of veggies and fruits, and easy on the carbs and meats), juicing, cardio exercise on a regular basis, getting plenty of sleep, and reading poetry and fiction to keep your mind happy. I promise this helps.
dav (Jun 14, 2006 11:16:14 AM)
Rob, Is there any book about trading the news in the Forex Market? (I’d like to learn more about it…)
Rob Booker (Jun 14, 2006 11:16:27 AM)
Answer: I teach some news trading strategies, and you can send me an email about that. Also, kathy lien's book is good for this too.
deskjockie (Jun 14, 2006 11:17:20 AM)
I agree that the psychological side of trading is the hardest to master. which of the ten books you mention would be best to address that issue?
Rob Booker (Jun 14, 2006 11:17:35 AM)
Answer: The Market Wizards series is fantastic. After that, the Mark Douglas book Trading in the Zone.
kkr (Jun 14, 2006 11:19:05 AM)
Rob -- any recommendations on system building books?
Rob Booker (Jun 14, 2006 11:19:41 AM)
Answer: There are no good books on the subject of systems building. None. I have looked everywhere and cannot find a good one. My book next year will have lots of information about this.
IRG (Jun 14, 2006 11:21:16 AM)
Which book influenced you more than any other?
Rob Booker (Jun 14, 2006 11:21:38 AM)
Answer: Reminiscences of a Stock Operator has been a huge influence for me. The Paul Tudor Jones interview in the Market Wizards has been huge too.
Rob Booker (Jun 14, 2006 11:22:00 AM)
And the Bruce Kovner interview.
FXstreet Moderator (Jun 14, 2006 11:24:15 AM)
I would like trade some of the more exotic pairs. Who is a good dealer broker to execute trades through?
Rob Booker (Jun 14, 2006 11:24:21 AM)
Answer: Oanda is a great dealer with very good spreads on the exotic pairs.
FXstreet Moderator (Jun 14, 2006 11:27:04 AM)
Thank your very much for that Rob.
FXstreet Moderator (Jun 14, 2006 11:27:21 AM)
That’s all we have time for Today .
FXstreet Moderator (Jun 14, 2006 11:29:39 AM)
You can visit Rob Booker's web site at www.Robbooker.com
FXstreet Moderator (Jun 14, 2006 11:29:49 AM)
Thank you all for your participation. See you soon!
FXstreet Moderator (Jun 14, 2006 11:30:47 AM)
If your questions were not answered you can email Rob at firstname.lastname@example.org