( For those of you who do not want to read the whole blog post, you can download the book here FOR FREE “Principals and Psychology of Day Trading” no signup or anything )

YOU CAN ALWAYS LEARN SOMETHING AND SOME OF THE BEST THINGS ARE FREE

I was on a board discussing account minimums and people trading small accounts. I think a lot of people have really bad information on trading with a small account. Trading with a small account means trading with ‘scared money’ until you figure out what you are doing. All of us started out as ‘newbies’ and learned along the way.

There are some good educators and mentors out there , but there are more scam artists BY FAR out there preying on ‘newbies’ promising a lot with a small account.

I know one ‘educator’ that does not trade actual money ( I am not saying the educators name, but you know who you are ) says things like ‘We made $900 and only needed $1,500 of margin’. Yeah, right. A three contract trade needs more like $6,000 to $15,000 and that is still pushing it.

Anyway, my thoughts can be summarized as :

I guess what I am saying is being under capitalized is bad, not knowing how to trade is worse.

It is quite true. If you are trading a small account , you probably will not make enough to live on and you really , really , really need to understand risk management ,the psychology of trading and have realistic expectations.

Anyway, it lead me to think that there are some free resources that can help others learn how to trade without have to send money to an ‘educator’. Not that all educators are bad, but there are things that can help traders in general. There is also free education on trading on most of the exchanges websites that will get you started.

I have learned a lot about trading from free or close to free sources. From the exchanges, from other traders and by reading a lot. ( I have more formal training in finance, but that really doesn’t apply to trading. )  So here are a couple of free ebooks for everyone and especially for those starting out with small accounts.

A GREAT BOOK YOU HAVE PROBABLY NEVER HEARD ABOUT

Well, this guy gives the book away on his website. “Principals and Psychology of Day Trading” no signup or anything. No need to give your email address or anything else.

I don’t have any connection with George or his site, I just enjoyed his book. It does not read like a traditional manual, but more like a series of lessons learned via experience about day trading in the pit and on the screen.

Now, I don’t agree with every thing he writes, but I do agree with a lot of it. His methods are pretty old school, which is to be expected coming from a person who started trading well before electronic trading was ever a factor.

It looks like the guy started to write a book to sell , but in the end just gave it a away. Who knows? Any way , it is free so go grab a copy.

Now on to the second free book…

REMINISCENCES OF A STOCK OPERATOR

I always keep reading when I have the time ( which is really rare ) and I encourage everyone else to do so also. I have read Reminiscences of a Stock Operator a few times and every time I find myself learning something.

I must admit, the first time I did not read the book all the way through a few years ago. But every time after that I learned something new and read further. Did I mention that the book is in the public domain now? So it is free.

You can always learn something new and some of the best things are free.

PIMPING MY NEWSLETTER

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Photo By John Picken It is a picture of three Chicago exchanges all in one picture.

REFCO…YOU REMEMBER THEM  DON’T YOU ?

This book was originally published by a little outfit known as RefCo. My copy of this book is originally from the Refco Private Clients Group.

Refco was a pretty messed up company. They were the largest futures broker in Chicago in 2005. It went public in August 2005, had a crisis in October and filed for Chapter 11 a few months later.

Stock went from $28 to $0.80 when it was learned the CEO was playing Enron type tricks with the accounting. The CEO  Phillip R. Bennett  earned 16 years in jail for this stunt.

AND NOW FOR THE BOOK

Anyway, back to the book. It read a little like an advertisement for RefCo which makes sense because they wrote it for their clients. It is now published by Wiley press, since their downfall.

Some of the other chapters cover things such as what are 1256 contracts ( They are a tax break for US futures traders). What regulatory organizations exist and what are their roles, such as the CFTC. Other chapters cover things like the different types of orders and the different players in the market.

Take chapter 5, “Using an Auto-Executing Trading System” for example, gives an overview of what you need to look for in an auto execution system. Not how to build one. My guess is that they would try to sell you a system if they could.

BOTTOM LINE

Nice read for a beginner to intermediate trader if you can get it from the library or borrow it. Unlike some books, you won’t get anything out of it by reading it a second time. It is a complete , but slightly outdated reference. It tells you everything about futures trading except how to actually trade futures.

I give it a C+, not crappy, but not a book I would want to give up shelf space to have in my office. It is a cheap book, you can pick it up for about $10 bucks.

* REFCO Private Client Group, formerly known as Lind-Waldock, founded in 1965. Lind-Waldock was acquired by Refco Group Ltd. in 2000 and became a division of Refco, LLC, in 2001. In 2005, the firm changed its name to Refco Private Client Group. Then the whole thing went bellow up.

REALLY SHORT REVIEW : GOOD BOOK FOR THE QUANT RETAIL TRADER

LONG REVIEW
I read a lot of books ( when I have the time ) and I came across this one and I was pleasantly surprised. I didn’t pick up THAT much from the book, but it is well worth the read. It codified a lot of thoughts I have had over time and that is always a good feeling.

GOOD POINTS

It is not as ‘formally’ written as a lot of trading books. It reads more like a conversation with someone who has been trading for a while. If you are a ‘advanced’ retail quant trader , then this is a book for you. Gives you insight how the home quant traders can beat hedge funds in investment performance. The author has worked at hedge funds and quant shops so he knows what he is talking about.

BAD POINTS

So now that I have given you the good parts,  the bad parts about the book  is that ‘lightweight’ if you are a heavy in quant type trading ( like a large fund ) and it is a bit short at 160 odd pages. Then again, if you are using NinjaTrader you are probably more in the ‘non-billion-dollar-hedge-fund’ area of trading like me.

CONCLUSION

If you plan on using Ninja Trader to auto execute a strategy, I would recommend this book. If you are just interested in learning about quant trading for the single investor, I would really, really recommend this book.

The author has a blog so you can check that out also.