Trade Like A Casino

This is the second book from Richard L. Weissman... The first book was fantastic. In fact, it is one of the selected books that will remain on my book shelf for a long time. The second book..... well, not as good as the previous book. As usual, repetition is the main issue. It becomes so obvious especially when I just finished his first book and everything still remains fresh in my mind. So, end up, my fault; not the author's fault, LOL.

One major differences compares to the first book is... this second book tends to focus more on theories. As such, please do not expect to see tons of technical stuff. In fact, one of my expectations on this book is to have tons of technical studies like what I read in the previous book. Obviously, the author chooses to focus more on psychological aspects (especially the last part of the book). It is perhaps beneficial for someone who has never seen any of these topics. For me, it just sounds too familiar...

Another small flaw is on the charts presented... As mentioned above, the author seems to focus more on theories. As such, charts presented do not help at all. In fact, the page length of each topic tells the whole story. In my humble opinion, the necessity is simply not there.

Like I mentioned above; relatively, under certain comparison, this second book does not seem to be as good as previous one. However, this book is still not a bad book. Rating wise, I am giving a 9/10. The single point deducted are purely due to repetition and some minor flaws as mentioned above. Other than that, this book still qualifies as one of the book that I rated highly. End up, we all are familiar with casino and we are fully aware on how they grab our money. So, if we cannot beat them, let us be one of them our self, LOL...

Some nice quotes:

You have a greater possibility of being on the right side of the event if you are trading in the direction of the long-term - one to six month - trend, and a greater likelihood of being on the wrong side if you employ a mean reversion model.

If by trader intuition we mean finding and excuse to abandon a rule-based positive expectancy model or rules of risk management, then such intuition must be avoided at all costs. 

Stop orders are the key to risk management methodologies and stop limit orders are not. Stop limit orders are for offense and stop orders are for defense. Stop limit orders are for position entry since they offer the ability to enter into breakouts from sideway markets or trend reversals without obligating us to enter at the next available price.

There is only one acceptable reason for abandoning a positive expectancy trading model, namely, its replacement with an even more robust model.

If I were to give you the most robust model ever developed, it might not help because, in order for you to implement that model, it has to match your trading personality.

The casino never abandons its rules of risk management regardless of winning streaks, losing streaks, the types of player entering, the time of day, and so on. It is precisely because they do understand the business that they are psychologically okay with taking losses and continuing their disciplined adherence to rules of risk management. 

If you want excitement, take up skydiving or bungee jumping. Casinos do not operate for thrills or entertainment; they do it for profits. By contrast, it is the players - who have probabilities skewed against them - that go to casinos for entertainment. 

Casinos never let their overhead or lack of opportunities at 2 a.m on a Wednesday lead to closure of the casino, changing of the odds on their games, or abandonment of table limits. 

A final word of caution regarding the incorporation of volatility indicators into counter-trend trading models: Be careful. Despite the protective fail-safe criteria that were built into the high volatility mean reversion system, because these are counter-trend system, they are by far subject to fat tail event risk. When a market shifts, these systems are subject to risks, which could potentially overshadow rewards, sometimes dramatically.  

Mechanical Trading Systems: Pairing Trader Psychology with Technical Analysis

This is one of the two books that I bought recently by the same author. The moment when I flipped through, I know I will love this book. At the end... yes, I am right. This is one of those books that deserved a place on my shelf....

Richard L. Weissman produced an excellent write-up in this book. It focuses on mechanical trading systems even though the author did an excellent split by dividing the whole story into three significant groups (Trend following, mean reversion and short-term intraday system). As such, we have a very detail analysis in each case. The best part is....strengths and weaknesses are clearly stated and the readers enjoy the luxury to fit own-selves into each respective category.

So far, this is the only book that I agreed almost 99%... The only school of thought that I object is on the issue of parameter optimization. Other than that, I see myself nodding all the way and I think I am very much living in the same world with the said author. One good example where my small mind is aligns with this book... The author mentioned umpteen times about the importance of simplicity: "I believe the more conditions added, the lower the probability of replication of similar results in the future." Simplicity is the key word here and simplicity is my own motto since day one....

More interesting quotes (Excellent reminder?) as below:

1. The main purpose in adopting mechanical trading systems is reinforcement of positive trader psychology and elimination of destructive behavioral habits. The reality of taking what appears to be an optimal profit off the table only to witness its doubling or tripling is absolutely devastating to trader morale and discipline. 

2. Usually newcomers' temptation to eliminate the outliers grows stronger after a large unrealized profit gives back a significant portion of potential gains. The facts are... No one ever captures the top or bottom of a trend... Cutting off the outliers hampers our ability to financially weather the equity drawdowns that are inherent in any trend following strategy and increases our risk of ruin.

3. Trade around the core position - this helps with the psychological problem of thinking you need to earn your pay by being active while not sacrificing your position. 

4. Logic might lead us to believe that 50% of all traders should succeed. The odds are much worse because the essence of successful trading entails consistently doing the natural and uncomfortable thing.

5. The more parameters added to a trading system, the more closely that system's criteria has been fit to the data. The closer the parameters have been fit to a particular data history, the less likely that these criteria will be able to filter out randomness within the data series. 

6. Mechanical trading system work because, through repetition, they train us to embrace the unnatural until it almost becomes second nature. 

This book may sound too simple to those who are looking high and low for get rich quick scheme. However, "simple" minded trader like me found it good enough since I stop searching for Holy-Grail long time ago, LOL. This book, in fact; serves as a good reminder to certain theories that shaped my belief since day one. As such, I appreciate the facts that it refresh my mind and reinforce certain beliefs that shake at times. Having said that, I am going to rate this book at 10/10. Next, I am going to continue with Richard L. Weissman's second book on "Trade Like A Casino"... Stay tune... 

Warrior Trading

Warrior Trading... by the so called "warrior" trader? Ok.. it is actually a piece of work from a FX trader. Surprisingly, with the combination of fundamentals (How many FX players do that? LOL), technical analysis and tons of  "warriors" concept, I actually lost the track at the very first beginning... Damn, I cannot even get a simple glimpse of so called "Inside the mind of an elite currency trader"... LOL.

This is a book of mess... In my humble opinion, it is not a normal pollution book. In fact, it pollutes seriously regardless of mindset, methodology, etc. The so called "warrior" stuff are useless to me. In fact, I cannot figure out the real intention behind this book. No offence; but, overall, this is a very lousy book!

Ok... enough comment on this book. Damn, I cannot even find more words to further comment on this book, LOL. Final rating? Of course, it is a 0/10. This book was given out immediately after I flip through the final page.... What a disappointing book! 

Stalin and the Soviet Union

This is a simple book by Stephen J.Lee. In fact, I read about "Peter The Great" (another book by the same author) before and that is why I bought this book. Honestly, I love the way the author presented history ~~~ Simple, yet full of details...

This book went through the great man in the history of Soviet Union. It started by introducing Stalin's rise and rule follow by analysis on his politics, economics, culture, foreign policy, Soviet Union at war, before summing it up with Stalin's post war regime. At the end, it is an interesting history. There is one phrase that really caught my mind: "Stalin misinterpreted Hitler's intentions. It was fortunate for Stalin that Hitler's subsequent errors were even more serious than his own." Just when every historians praising Stalin for his great work in World War II, sometimes we neglected the facts that the other party is the main culprit. Hmm....

I am very much attracted to the whole story especially when there are questions and sources provided to clarify each topic. I thought this is a creative way to present histories. After all, we are talking about history. This is a subject typically viewed as boring, dull and dry by many. Hence, the short (simplicity) contents actually help readers and they may find it easier to absorb. By then, if details are needed; move on to the next sources section as provided. If not, just bypass it and you are transfer to the next chapter. It is a relaxing way to study history, LOL....

Ok... still a minor flaw.... After all, simplicity is always about sacrificing details. In fact, I spend a lot of time digging through details via Google after finished the whole book. Rating wise, I am giving 6 out of 10. I like this book, but honestly; I would have prefer a more details book on Stalin...

Fibonacci Trading (How to Master the Time and Price Advantage)

Ok... after a while... finally some pollutant stuff to shout here, LOL. The last book on "Profitability and Systematic Trading" obviously wanted to sell something... This book is having the similar intention... The only differences are: the last book at least sell something unique...  this book is selling some Holy Grail stuff!!! LOL...

Honestly, Fibonacci is the only prediction tool that I always keen on mastering as there is some logic and sense behind it. However, this great stuff never becomes my main tool except in the earlier part of my career. Perhaps, the fact that it is rather difficult to code it into standard mechanical systems is the main hindrance for me. After all, we are talking about something which might be subjective, depends on the viewer. Frankly, I have no prejudice and bias towards any reading materials of this subject. But, it has to prove the facts and logic of using it. Unfortunately, this book failed to convince me completely.

In my first glance, I thought this is a thick book (about 300 pages). But, flipping through for the first hour, a reader will realize how thin it can be since most of the pages are covered by charts. Ok, thick or thin is not an issue as long as the contents justify its quality. But, despite tons of examples and charts, I found nothing about the methodology and rules behind each example. So, the title itself is kind of misleading here... where are the materials about "How to Master the Time and Price Advantage"??? LOL

To be honest, mastering Fibonacci is hard enough. Yet, we are bombarded by this kind of materials everywhere. In my humble opinion, it is never a tough task to highlight any sort of accuracy by plotting Fibonacci in a specific chart. (After all, it can be custom made, LOL) But, doing prediction in real life is a different issue... This book obviously failed in assisting and guiding me towards a clear picture. As such, out of 10, I am rating it at 0. Honestly, I cannot see myself giving any single point when all the charts and examples remains as charts and examples without explanation... What a disappointing book! 

Profitability and Systematic Trading

When I first received this book; well, this was what I thought: Hmm... this is just another of those books (Pollution books, LOL)... But, since it is a thin book, I thought why not flipping for fun since I know I am going to finish it up pretty fast...

Ok... conclusion: Yes, this is really one of those books in the market. The author obviously is promoting something for the readers to buy on after reading this book. The last 42 pages of source codes did enough to prove my point. Well, there is nothing wrong with such intention. After all, the author did not force us to buy his book in the first place, LOL. The best part is... the author is actually promoting something unique... Something that never crossed my mind before. In fact, it is something interesting to ponder about... As such, I ended up not feeling bad even though the 42 pages of codes initially sounded like some kind of rubbish to me, LOL.

So, is there any good point to pick up from this book? Honestly... the answer is yes! This is actually not a bad book for beginners. I believe novices and beginners might find it interesting since it does not involves complexity. In short, it is a book with straight forward points and any readers shall catch up easily.

As for non-beginners; well, this book at least serves as a good book for revision purpose. After all, it is a thin book. Off and on, we need a thin book to refresh what we had learned and what we are practicing at the moment. Topics discussed may sounds familiar. But, familiar stuff does not means it is useless. For example, listed below are some of the very familiar quotes (but still sounds useful to me) :

1. If a trading system is too simple it risks being predictable and may generate too many false signals. If it is too complicated, it risks missing out on profitable opportunities.

2. The reality of market dictates that the exact timing of price swings can be known only after their occurrence and not before. Despite that, trading system developers have attempted to devise indicators, with the intention of predicting the timing of similar events.

3. Some trading systems may exhibit the least variation between historical and actual performance in longer-term trading and the highest variation is in intraday trading.

4. Variation between back-tested and actual performance can be decreased if the system is used in liquid markets. 

Of course, I do not agree 100% on this book. For example, I could not accept the risk percentage method although it is very much recommended by the author. My point is simple... the risk should be determined by the market, not by a pre-determined risk level that a player willing to risk. As such, I found myself do not agreed much on the chapter of "Risk & Money Management", be it a Martingale or Anti-Martingale stuff...

Overall, this is a book with strengths and weaknesses. I personally rate it at 5/10 since I think I love certain part; hate certain part and certain part just sounds too simple to me, LOL. Lastly, I would like to repeat what I said above... It is just a thin book. Since it would not take up a lot of time, why not flipping through? Maybe there are some gems along the way? Hmm... LOL

The Millionaire Next Door

This is a book published in the mid ninety's. In fact, I read the second book from Thomas J. Stanley (The Millionaire Mind) previously and I love that book so much. As such, I had been looking forward to read this book ever since... Fortunately, I finally found this book thanks to a buddy...

Well, relatively... I think this is a better read compares to the author's second book. I found this first book more "enterprising" compares to the second one. Obviously, there are tons of repetition stuff in the author's second book.

The best part is... although this is a book from mid ninety's; the ideas and inspiration are still applicable in current era. The more I read it, the more I see what I am lacking... End up; it serves as a good guidelines on what I should be focusing on... After all, the route to millionaire is nothing different from those days compares to current days...

Furthermore, there are certain discussions on the next generation. Overall, this is not only a book about millionaire for adults. It is also a book that provides guidelines on how to nurture next generation. For example, the author quoted that: "The more dollars adult children receive, the fewer dollars they accumulate, while those who are given fewer dollars accumulate more." How true... This is extract from the chapter about "Economic Outpatient Cares". It serves as an excellent guideline for young parents like me. Listed below are the other two excellent guidelines for young parents:

Kids are very smart. They will not follow rules that their parents themselves do not follow. We (my wife and I) were well disciplined parents... We lived the rules... we taught by example... They (the children) learned by example. 

Cash give them too many options. Media, especially TV controls the value of our young. There's too much emphasize on consumption...What I have always told my children (is) if you need to make a major purchase, you first must fund a good bit of it yourself.

The only flaw is... I found this book still not as details and not as attractive compares to "All the Money in the World ". Honestly, "All the Money in the World" is my all time favorite book. Obviously, the differentiation lies with the sample collections. "All the Money in the World" is more focus and studies collected seem more wider and practical. Meanwhile, "The Millionaire Next Door" is more general and the details is no-where near "All the Money in the World".

Overall, this is a nice book to explore. As such, rating wise; I am giving 8/10. I appreciate the efforts done by the author in collecting and analyzing the whole millionaire sample. After all, not everyone can stay close with millionaire all time. This book is going to remain on my library for quite some time. If I can go through "All the Money in the World" three times, this book surely deserved my second attention in the future...

Lastly, some significant nice quotes:

Have you ever noticed those people whom you see jogging day after day? They are the ones who see not to need to jog. But that's why they are fit. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status. 

To build wealth, minimize your realized (taxable) income and maximize your unrealized income (wealth/ capital appreciation without a cash flow).

If your goal is to become financially secure, you'll likely attain it... But if your motive is to make money to spend money on the good life,... you're never gonna make it.

Money should never change one's values... Making money is only a report card. It's a way to tell how you're doing. 

Products change people. If you acquire one status product, you will likely have to purchase others to fill up the socially conspicuous puzzle. They are a threat...

Comfort Zone Investing

Frankly, I forgot how I ended up having this book. But, after spending my last 48 hours with this book, there is only one word to describe my feeling at the moment: Speechless!!! Damn...this is a real lousy write up!!!

Serious... I still confused on the purpose and intention of the author in producing this book. I thought it is a book about adjusting portfolio through certain strategy in order to reach the so called "comfort zone". Yet, the whole book said nothing about it. At the end, the only way to reach comfort zone is to avoid all kind of investments (OMG!!!). Perhaps, that is why we never ever heard "comfort zone" in investing. After all, risk itself is equivalent to certain kind of return. Comfort zone? Just avoid all risks as according to the author, LOL

Then, we got this very passive attitude in the whole book. Instead of being proactive in doing investigation and studies on various investment vehicle, the author choose an easier path by digging out the weaknesses and flaws in each option. In short; instead of giving solutions, the author tends to avoid all possible negative outcome. Unfortunately; according to him, every single investment tool seems to occupy ONLY with negative outcome except the real estate stuff. Serious... that is an easier advice to pass on... simple... perhaps reasonable... but nothing great!

Rating wise, I am going to rate 0/10. It is a waste of time in reading this book. Overall, this book presented nothing to me personally and it is simply too naive to reach to reach the so called "comfort zone" by tailoring your portfolio in such a way. One word to sum it up: LOUSY!!!