After we have basic futures knowledge, certain technical analysis capabilities and correct trading concepts, we want to develop a trading system that can be used for our own use and use it in practice, so the following books will help us.
The first is The Law of the Turtle Trade, by Curtis Feith.
There was a well-known "turtle trading experiment" in the trading field, and before that, people would argue: is a good trader born or can be cultivated?
When trading guru Richard Dennis and his friend William Eckhart, on vacation at a turtle breeding base in Singapore, also discussed the topic, they decided not to talk about it, but instead took out real money, picked 10 idiots who knew nothing about trading, taught their own trading system, $100w each, and let them go to the real operation to see how the final result was.
The lucky ones who were chosen were called "turtles", and founder Richard Dennis declared: "We want to train traders, just like Singaporeans raise turtles." ”
Curtis Fiss is undoubtedly the most successful turtle. Transaction records show that Mr. Feith, who joined the Turtle Program at just 19, made about $31.5 million for Dennis.
Years later, as a witness to the events, Fiss wrote the Turtle Trading Rules. The first half of the book details the course of the experiment, revealing how Dennis and Eckhart trained ordinary people to become outstanding futures traders in just two weeks. The second half is a dry focus, and the author details some of the most heavyweight transactions in which turtles participate, as well as their timing rules, which are also known as turtle trading rules.
The turtle trading rule can be said to be the pioneering work in the field of programmatic trading. The basic rules of this set of rules are simple, and the essence lies in the money management system integrated into it. Specifically, one is to determine the position according to the ATR, so that the position can be flexibly adjusted in combination with the volatility in the case of fixed initial risk. The second is the nested positioning rules in the basic rules. And all this purpose is the embodiment of Dennis's philosophy:
"Seasoned players gamble very little most of the time because the advantage is on the casino side. They are waiting for the right moment, waiting for them to accidentally gain an advantage over the casino. Once that opportunity is reached, these players will increase their stakes and use their advantage to overwhelm the bookmaker. ”
After in-depth study of the turtle trading system, we can generally have an understanding of all aspects of the need to build a trading system, at this time, we may want to become a programmatic trader, want to develop more different types of trading systems, enrich our arsenal, then at this time, we have to make a lot of efforts.
First of all, the last tome book" trading systems and methods, by Perry Kaufman, seems to be a Chinese edition that came out in 2018 or 2019, and I remember that before that, I still held the English version for a long time.
When it comes to Kaufman, this person may be relatively unfamiliar to everyone. But the founder of adaptive moving averages, the author of The Savvy Trader, may become more familiar to everyone, yes, this person, from rocket scientist to one of the pioneers of quantitative trading.
The table of contents in the book is quite comprehensive and details all aspects of the trading system. This book is also one of the main reference books for quantitative trading researchers.
In addition to the introduction of basic knowledge, the author is also profound in his understanding of the trading system. For example, in the evaluation of the quality of the trading system, the appropriate one is the best; financial analysis research, the pursuit is to find normally right, avoid normally wrong and so on.
Then if we want to develop more trading systems with the help of various technical indicators, we can look at the book "Guide to Computer Analysis of Futures Markets", written by Charles Lebeau/David Lee. David W. Lucas.
As a programmed trader, the author uses the way of the past to show the reader one by one what kind of problems will be encountered when using various technical indicators to build a trading system, how to solve them, what kind of advantages and disadvantages there are after the completion of the trading system, what needs to be paid attention to when using, and what directions can be improved... It's really a hand-to-hand feeling.
The biggest feeling I get from this book is sincerity, and one of the most memorable sentences is that when making a plan, always imagine the worst and be prepared for it—thank yourself for your good luck when the worst doesn't happen; and when the worst happens, thank yourself for your foresight. In this way, you will stand the test and keep climbing.
Of course, if we don't want to be a strict mechanized system trader, it doesn't matter, grasp some key rules, we can also do relatively flexible operation, do as you please without overstepping!
So finally I have to recommend the book "Ghost of Wall Street", the protagonist of the book is an anonymous trader who has traded on Wall Street for more than 30 years and achieved great success, he calls himself a "ghost" and shares his lifelong trading wisdom for the world.
The ghost elaborates on the three rules that make himself a great success in the trading market.
One: only hold the correct position.
There is only one criterion for judging whether the position is correct or not, that is, floating profit, the larger the floating profit, the more correct the position is held. After opening a position, there is no rapid floating profit or even a position that begins to float losses, which defaults to the wrong position, clear in time, and do not wait for the market to prompt you that you have made a mistake.
This point is a certain subversive, we usually say "plan your trade, trade your plan", set a stop loss after opening a position, and hold the position before the stop loss arrives. But the ghost's view is more absolute, that is, as long as the position is not quickly opened after the large floating profit, it is regarded as an incorrect position, and it must be cleared.
The essence of the rule is that the ghost shows near zero tolerance for unprofitable positions, waiting for a transaction to prove wrong, often means that we have to bear a lot of losses, we might as well take these losses to try more, to capture the entry can quickly get out of the cost zone of the trading opportunities. Another benefit of this is that traders will never be bitten by the market and will always be able to retain enough strength for the next trade.
However, rule one is likely to make traders fall into multiple frequent small stop losses, for beginner traders, the psychological negative impact is very large, so in the actual use process, it is also very important to improve the success rate of entry.
Unfortunately, the ghost did not elaborate on the details of the choice of entry time, but from the requirements of rule one, we can infer that the order that can become a position in the ghost account must be a list that quickly leaves the cost zone after entering the market. In fact, this point is essentially the same as the large range of days in "Short-term Operation Secrets".
The second rule is to increase your position: without exception and correctly increase your profitable position.
Emphasizing the importance of increasing the position, which is similar to the turtle trading law, it is hoped to increase the chips after gaining an advantage and obtain a greater profit-loss ratio.
It is also a little regrettable that the author has not made a detailed discussion of the specific timing of the position, and we need to explore and summarize in our usual practice. Later, I have the opportunity to write about some of my experiences and feelings on this piece.
The ghost also mentioned rule three, combined with the volume price pattern to determine when to leave. This personal feeling is more like the application of a technical indicator, which is a bit thin compared to the trading wisdom contained in the previous two rules.
The recommendations of the above two issues of the book list are only based on my personal subjective feelings, and it is inevitable that there will be biases and omissions, please understand. Trading is undoubtedly a very practical job, but if all our lessons are learned through real experience in the market, then the cost is too high. Reading through classic books will inevitably help us step on fewer pits and accelerate our growth. I hope this list of books is helpful to you.
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