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Trading Basics: Evolution of a Trader Hardcover – November 15, 2012
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“The three books in this series were written for people unfamiliar with the inner workings of the stock market, but will still curl the toes of professionals, too. Research is used to prove the ideas discussed, but is presented in an easy to understand and light-hearted manner. You will find the books to be as entertaining as they are informative and packed with moneymaking tips and ideas. Use the ideas presented here to hone your trading style and improve your success. Whether you are a novice who has never purchased a stock but wants to, or a professional money manager who trades daily, these books are a necessary addition to any market enthusiast’s bookshelf.”
—Alan Battista, Stockineer.com Book Review
From the Inside Flap
How you trade or invest in the stock markets depends on market conditions. Buying and holding on to a stock during a bear market can mean a substantial decline in net worth. Day trading when the markets are soaring can add to stress unnecessarily. Thomas Bulkowski discusses the evolution of a trader from buy-and-hold to position trading, swing trading, and day trading in his hotly anticipated series of how-to guises, Evolution of a Trader.
The first book in the series, Trading Basics, is a practical introduction to the art and science of stock trading. The book discusses money management, a topic so often overlooked in financial works. How do you size a position properly? How many stocks should a portfolio hold for proper diversification? Should you scale into or out of positions? Do dollar-cost-averaging and averaging down works? He answers these questions and more.
Choosing the correct type of stop can mean the difference between success and failure, profit and loss. Learn why stop-loss orders cut profit more than they reduce risk. Sometimes, stops are best left unused because they cash you out of potentially winning trades prematurely.
Bulkowski discusses a half-dozen types of support and resistance, then he measures and compares their effectiveness, If you can determine where a stock is going to reverse because of overhead resistance or underlying support, then the riches on Wall Street can be yours. His research is a gold mine of information waiting to be unearthed.
He discusses forty-five tips that every trader should know. Have you heard of the 2B rule? Or how about trading busted chart patterns? Does divergence in the RSI indicator really work or have today’s markets made it obsolete? Bulkowski offers tips on finding the market direction, determining when the market has bottomed, and over a dozen tips on when to sell.
He wraps it all up by helping you diagnose trading problems. Are you entering or exiting your trades too early or too late? Did you average up? Are you buying out of season?
Bulkowski’s work sets an example of how financial books should be written. He doesn’t just repeat what others have said. Rather, he investigates and researches his facts before teaching the reader in an entertaining and informative style that is accessible to the beginner and the professional. Anyone investing or trading the markets can benefit from this series.
Top customer reviews
Bulkowski’s Trading Basics is the FIRST investing book I have read that cleanly backs its statements with FACTS from the author’s ORIGINAL RESEARCH. I was excited to discover many ideas I have not found elsewhere. If you are a serious trader, you will be pleased to get your hands on the tables and charts in this book.
Do not let the title, Trading Basics, fool you. If you have never researched a stock, read a chart or placed a trade, there are plenty of good beginners’ books but this book is so much more. If a beginner asks how to make money in stocks, let them read the short chapter 1: Bulkowski’s personal story of “How to Retire at 36.” It will inspire and challenge them.
If you are serious investor, intent on always improving your stock investing with information that is research-based (and not a blind repeat of common “truths’”), then you will be surprised, delighted and probably shocked by some of the findings in this book.
After 13 years of trading, I am now in the process of incorporating a new layer of investing fact-based rules from this book into my investing plan.
A FEW OF THE MANY TOPICS BULKOWSKI COVERS I HAVE NOT FOUND ELSEWHERE:
• How much money does it take to get started investing – guidelines and justifications for a safe starting investment for each type of investor (position, swing, trend or day traders)?
• A unique position-sizing algorithm that takes into account volatility of both the stock and the market.
• Managing a position based on both stock performance and market rend
• What is the optimal period to hold a stock?
• How many stocks should be held adjusted for trading style?
• Analysis of how nine variations of stops (such as fixed percentage, volatility, chandelier, average true range, and top stop exit) perform including average loss, hold time, percent stopped out, win/loss percent and profit/risk change.
• AND MY FAVORITE: a whole myth-busting chapter on the effectiveness (and ineffectiveness) of twelve types of support and resistance.
• Each chapter ends with a CHAPTER CHECKLIST of key points and lessons to emphasize the most valuable information.
The book has many tables with the results of Bulkowski’s statistical research, extensively annotated charts of actual stocks showing the concepts in practice, and critical formulas every trader should know. If you are serious about making money in the stock market, buy this book.
* money management
* stop placement
* support & resistance levels
* recurring patterns of the market backed by statistical research
* entry & exit timing
* market trend & stock trend relationship
Having read a few books by this market veteran author, I find his books distinguished from the rest by a single, crucial aspect:
Thomas conducts and discusses his own research, methods and tools of many years, which he courteously shares with the reader both in his books and at his website (just google his name!)
This book is a walkthrough of various trade ideas most of which you can find in some other sources. Nevertheless, it is helpful to have them condensed in one book and reviewed by a weathered stock trader.
The author very often backtests the presented ideas and backs his opinions with the gathered statistical data. The best thing about these tests (and I would say my biggest profit in reading this book) is that they inspired me to backtest the presented ideas after incorporating them in my trading system, which helped me earn a few bucks more per annum.
A smart novice who starts trading now may hesitate because the news already screaming the bear market is coming. He will find out more if he also read the stage analysis in Fundamental Analysis and Position Trading. Tom covers them quite comprehensively.
The more you trade, the more you will appreciate the statistics in the books. Tom doesn't guarantee a pattern works, as a reviewer implies. Tom provides statistics, which by definition deals with probability. A trader doesn't ask for guarantee; he only looks for probability on his side. Tom's books help.
Thomas is a genious and puts his knowledge in your hands with his books.
You will learn how to do the stuff the trading pros do if you read his books.
I have all 9 of his books