Beware the black swan...

[#1]

For all of you that spend endless amounts of time pouring over charts, reading analyst reports and other such pointless activities I suggest you read fooled by randomness by Nassim Taleb....Nasim a trader himself will give you a great insight into how people are able to make a lot of money over time and then lose it back in a matter of days......I can highly recommend this read.....it is not a book about trading but rather about the philosophy of science and knowledge. What is fascinating is how the book will enable you ti understand how deleterious the media and analysts can be to the success of the long term success of the trader....

[#2]

Essentially the Black swan phenomena is a phenomena which occurs when you experience history repeating itself you believe less and less that alternative outcomes (like a market crash or exceptional rally) are possible ......after seeing white swans all your life you believe (and know) that swans are white....it takes only 1 black swan to change this...in the trading context traders never prepare for a black swan event....but the black swan event is the one that wipes them out not because it has a high chance of occurring but rather magnitude of the even when it does.....

[#3]

This is also known as the lottery effect - the mistaken belief that you feel in control by being able to choose your numbers in a lotto. Van K. Tharp demonstrates a system in one of his books on how to make money from random stock picks at random entry times just by managing R (risk), planning the exits and position sizing. The point he tries to make is that entries are not as important as exits.

[topgun]

Busy reading "The black swan", the follow up to "Fooled by Randomness". The point is that all traders are eventually devoured by black swans... as position sizes (abetted by increased use of gearing) and greed rise over time in line with growing levels of confidence.....

[SimonPB]

chartist, yu must read his follow up book, Black Swan. The ideas in the first book aren't fully formed yet and as such the second is a better presentation of his theory.

[#6]

thanks I will....

[#7]

Simon...u should draw up an essential reading list....personally I have found reading which looks at trading from a psychological level (such as trading in the zone)and philosophical level far more useful than any TA or business book which teaches u to imitate millionaires (mainly cause I am one already)...maybe i should reread that bit about how its all just luck?

[Galuc]

Well then Chart if u have made ur millions on ur trading abilities then u are cool, it is the rest of us paupers who need to tread lightly. I like the chirp about the luck, because that is probably 50% of the trade.

[john_1]

Thanks for the book recomendation. Best I get to exclusive this am.

[#10]

John beware... it is not a panacea for fixing your trading problems...I

[john_1]

Hhhaaa LOL! You are funny mate.

[Ameesh]

I've just completed this book last week, a real gem ! I've had to re-read some chapters a few times though, cos its not exactly 'light' reading ;)

[#13]

Ya , and remember we are only a millionaires when we have a million dollars - if you have a million rand then you are only one eighth of the way there .

[john_1]

Show me a bond free house owner who is'nt.

[schizo]

http://www.fulldls.com/torrent-ebooks-842800.html who needs exclusive get the pdf from above link- but you need a torrent downloader- try bittorrent or limewire

[john_1]

Last time I did that I got a book full of highlighter pen marks deleting alll the good stuff. But I will go have a look thanks.

[schizo]

yip also got that one with the highlights- think it was van k tharp- but the benefit of a pdf is that you can read it at work while your boss thinks you soo busy

[#18]

Up that goes without saying...

[SimonPB]

well surely one wants to be a Euro millionaire what with the $ being killed off .

[#20]

Is it just me or is that link for an mp3 torrrent, not a pdf?