To me trading is about more than math and entries and exits. I believe to be a truly great trader we must master our self. You must understand the risk of ruin. Profitability will only come from the exercise of some type of edge we have over the other market participants. few books, seminars, newsletters, or chat groups really dig into these crucial areas. Most rich traders when interviewed go on and on about these crucial areas. These are three things that primarily knock the 90% of new traders out of the market in their first year. Here are five books that I think can really help relatively new traders have a much better chance of success if they take the principles in these books to heart and apply them to their trading and personal lives.
“Poke the Box” The best way to learn is to get in the game. See what works and what does not. Try, try again, keep going. Keep what works discard what does not. Listen to those that help and stop listening to those that don’t help get you going in the right direction.
“Rebounders: How Winners Pivot from Setback to Success” The art of the comeback. Don’t let failure define you. Stay with the facts of a situation not your emotions. Go in new directions if the first one doesn’t work. Be proactive and comfortable with risk. Be patient and inspired by those that have already done what you are trying to do. Let your passion give you a mission and stay on course until completion.
“Anti-Fragile” This books just covers the basic principles that govern the universe it is not a casual read but well worth it. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better. This principle applies to traders in two ways: #1 when ‘fat tail’ ‘Black Swan’ events happen outside the normal understood distribution of a bell curve the traders that benefit and make the out sized returns are option buyers and trend followers primarily, they are usually positioned on the right side of these events. They welcome wild unexpected events while option sellers and reversion to the mean traders did not even think such things were even possible.
Also the traders that are able to learn from failure, grow from losses. and be educated from blow ups, generally are the ones that can not be stopped. While the fragile traders want to be right, want to predict, and hate to lose.
“Fooled by Randomness” That which came with the help of luck could be taken away by luck (and often rapidly and unexpectedly at that). The flip side, which deserves to be considered as well (in fact it is even more of our concern), is that things that come with little help from luck are more resistant to randomness. This book can help traders see if their trading results is from real skill or just luck. Many perma bulls thought they were great traders in bull markets until the market environment changed and they learned quickly that they knew nothing about risk management, discipline, system development, a trading plan, or a down trend. This book helps the reader see the difference between luck and skill with a tale of two traders. It is almost a trading book but not quite, it is mainly about probabilities and randomness being confused for skills.
“The Power of Now” This book is about bringing mindfulness into the ever present moment. The author shows the readers the fruitlessness of our continual emotional time traveling into the past and future through the mental vehicles of regret and worry. Eckhart Tolle goes deep down the rabbit hole with his attempt to show readers that we are not our emotions, thoughts, or ego, but really the clear consciousness that can get space from these internal storms and witnesses them without being consumed by them.