The 3 Most important Books in Trading

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​Hello traders! Heikin Ashi Trader here.
 
In today's video I would like to talk about books that influenced me. I would like to talk about three books. The three most important books I found out that were important to me as a trader. So books, I really really studied and read several times and got a lot of information for my trading career.
 
Let's start with the first book and I have to take some glasses because my eyes are not that good anymore and this is this book. This is the German version of the book but it's a book that was published originally in English and the author is Van Tarp and the title in English is "Trade Your Way to Financial Freedom". So it's a very famous book actually, Trade Your Way to Financial Freedom.
 
So what is this book about? Well, yes, it's a lot about money management, risk management but the most important thing to learn in this book in my view is to understand what a trading system really is. To really understand a trading system and to learn to understand what is a good trading system and what is not such a good trading system and you can make exercises and you see it here, I made a lot of exercises with all kinds of systems. Here, many years ago and it's really interesting to do and I would really advise you to do those exercises because it teaches you really to understand deeply not only from a mathematical standpoint but also really to deeply understand what is really a robust.

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A good trading system and which is not a good trading system. So for me as a trader, it is an important book and you don't need advanced knowledge in mathematics. It's simple math, the examples are clear and you can do it for your own training system, but I really recommend this book by Van Tarp so Trade Your Way to Financial Freedom; first book.
 
Second one, I'm quite sorry I also bought this book in the German version but I will immediately tell you which was the original title in English. This is a book by the author Gerald M. Loeb the title is “The Battle for Investment Survival”. This is a bit strange title: The Battle for Investment Survival. Okay, so this book was published in 1965. Right. So, this book is almost 60 years old and or 60  years on the market and it's really an amazing book because it's a book that not many people have read. If I talk with traders, “Do you know this book, The Battle for Investment Survival? Most traders would say, “No, never heard about this book”. But for me, it was really really an important book and I will only mention one story that the author is telling here.
 
In this book: One day his brother asked him to introduce him in the stock market, so his brother had no experience at all never made a trade in his life and he wasn't introducing his brother into the stock market and trading and he prepared an account for him with I think it was ten thousand dollars. Well which what was at the time 1965 quite a lot if money and his brother said you can trade whatever you want each stock because at that time you were trading mostly stocks there was yes there were commodity futures but you were mostly trading stocks at that moment and he said to his brother on one condition you're only allowed to trade one stock at a time. Okay. He was only allowed to buy one stock that means he could buy 100 or 200 of stocks of this one particularly stocks but he was not allowed to trade in another stock. So he had to close this position first before he was able to to buy another stock. This is a very good lesson so he had to really to take care and to buy the very best stock at the moment and if you know that this is your condition and this is a totally different approach than buying a whole stock portfolio which most investors do right.
 
According to Geral Loeb this is not a way to make money on the stock market to buy a whole portfolio with 10's and 20, 30, 40, 50 different kind of stocks so you're basically buying the market so according to this author it's much more clever to buy just one stock and the best stock. Then the second lesson in this story was when you find the winner. When you have a winner, suppose you have a winner then it's very important to learn to capitalize on this winner. So to buy more of this one particular stock not to buy another stock but to get more engaged in this winner. For me this was a really quite important lesson and I learned a lot from this book, The Battle for Investment Survival.
 
Third book, okay I think most of you will know this book. It's a very famous book and it is the book for each trader "The Market Wizards" and we have to be thankful to Jack D. Schwager who was the author of this well it's now it's a series he made some a couple of those trading interviews. Interviews with traders and he's going quite deep into the matter, deep into specific strategies of each trader. I just take one because you cannot talk about all those strategies which is quite interesting because if you read this book you will discover strategies you never thought were possible. So, I learned things out of these books. Incredibly, things really interesting and just one example for me as a scalper. Of course, I was looking for scalpers and there's one particular interview with Tom Baldwin. It's quite interesting to read this interview with Tom Baldwin because the way Tom Baldwin give his answers to Jack Schwager it's really really interesting because Tom Baldwin is not speaking much.
 
For instance, question: “Basically then you're still using the same basic trading style you started out with?” Answer, “Right”. “Is the fact that you started off with a chart influence trading bias a key element behind your winning?”. Answer, “Yes”. “Were there periods when you were unsuccessful or did you remain consistent?”. Answer, “Consistent”. “Didn't you have any losing months?”. “Yes I had one or two but not two together. No, never”, and it goes on and on with these short zen-like answers of Tom Baldwin. I really enjoyed reading this interview. I might have read it 10 times I think. So the Market Wizards is really basic reading stuff for each trader.
 
I think each trader should read those books, those series and especially this one first one interviews with Top Traders and there's so much information in this book, about trading and about the stock market. You really want to know this so those are my three recommendations, three books that were really important for me as a trader.
 
I hope you enjoyed it and see you next time. Bye!

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