Tag Archives: books

Talent is Overrated

I thought I’d post a review ’cause I’m reading this book at the moment and I’d suggest anyone who is learning to trade should read it. The basic premise is that ‘talent’ is not only over-rated in relation to becoming ridiculously good at something it in fact may not actually exist…

I’m not going to regurgitate examples from the book here (go read it for yourself) but simply state that even genius level performers got there not though some ‘divine spark’ but from deliberate practice and the development of ridiculous levels of domain knowledge.

Students of Chris Lori reading this will understand the point I’m about to make regards exercises/practice.

IF you go about looking at a singular aspect of the market in a structured and logical manner that gives you feedback¬†then you will learn that part of what’s occurring faster and more efficiently.

If you just throw on trades and read books about trading hoping to find some sort of shortcut (and we’ve all been there) you are absolutely not using your time in an efficient manner. You could actually be wasting your time.

The kicker here is what’s called ‘deliberate practice’ and just as the name sounds boring and un-sexy this is what it is and therefore why so few people do it. The number of hours of deliberate practice you do in order to learn a skill are basically what governs your ability in that skill. The sooner you start the better you will be…

So that’s my big lesson for the week/year ūüėČ If you’re trying to learn anything at all then I’d suggest you buy a copy of ‘Talent is Overrated’ by Geoff Colvin

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People I pay attention to…

So far it’s been a very interesting journey from the great plains to the foothills of the mountain that is ‘spread betting’

I began in earnest in about October 2010 after forking out about around ¬£2K on a two day course which promised much but actually delivered very little. The things I did get out of it like friends and some interesting contacts are of course invaluable so I’m not ‘poo-pooing’ the experience, it could however have been better value. In many ways spending this amount did really spur me on to make it back by becoming phenomenally good at this whole topic!

Even with this kick up the backside I spent the next three months essentially mucking about, trying to get someone else’s system to work for me with little success. Maybe I’m too independent? It’s probably fair to say I still wasn’t entirely committed and while I might have had a map I certainly didn’t have a compass to tell me what direction to go in. Too much information and no direction.

Since then I’ve run into some excellent resources/books/people and their contribution has been invaluable to how I’m approaching this challenge. So I present (in no particular order) the people I pay attention to regards learning to spread bet.

David Jones (from¬†IG Index¬†author of ‘Spread Betting the Forex Markets‘)

I recommend everyone watch his weekly analysis of what’s happening in the FX, Commodities and Indices which is available live Wednesdays at 12:30 pm or as a recorded webinar after the event. The main reason is, as a beginner, the more you can watch someone with experience analyse what’s happening the faster you will learn. Live attendees also post questions on a range of topics. Probably best not ask for yet another demo on how to place trailing stops though! (See vid from 11th May to get this joke) Midweek Update¬†

The¬†key¬†point is David focusses on trends, key levels and managing risk without getting sidetracked by indicators and other technical analysis voodoo which ends up with us all suffering from analysis paralysis… Simple, direct, straightforward and easy to learn from. Much better than trying to pick up details from charts in a book. Also very interesting to go see someone drawing information from multiple timeframes and how it relates to what’s happening TODAY.

Linda Bradford Raschke (one of the New Market Wizards on her site lbrgroup.com)

There’s always a heap of free and extremely useful content on Linda’s site which relates to the mechanics of trading and her mental approach is excellent. If you can’t stand reading another trading book then check out her webinar on mental performance – it’s an excellent listen. I’ve not got through very much of the content on this site but what I have looked at so far is gold. There’s also a brief(ish) document on what should go into a trading business plan and why you need one which is very good.

Dr. Van K Tharp¬†(I’m currently going through Van’s ‘Peak Performance 101 Home Study Course’¬†available here)

Just where to begin?! Although geared towards trading in the US the principals and mental approach Van teaches are completely applicable to spread betting. The sheer volume of useful information is quite overwhelming at first but Van’s mission is to teach a man to fish (think) for himself rather than… well, no-ones going to hand me a winning lottery ticket are they? If I could only recommend one piece of work to help someone improve their results it would be this one.

Malcolm Pryor¬†(author of ‘The Financial Spread Betting Handbook‘ – go buy it from Amazon)

If you’re in the UK and spread betting then this is the ‘foundational’ book to read. Answers questions you hadn’t even thought of asking yet and covers the basics which you need to know about but might have overlooked in your rush to conquer the mountain ūüėČ Malcolm takes a steady, no-nonsense, hype-free and business like approach to his craft. In re-reading this book for the third¬†time I still came away with 10 pages of notes on things to do, try, improve and implement immediately. Highly recommended after Van…

Simon Townshend (phenomenally successful UK trader)

Only recently discovered from Linda Raschke’s website but definitely worth watching his interview/powerpoint presentation which is available here. Now the reason I’ve included this recent discovery is that in the presentation Simon talks about the connection between overall market strategy and tactics. I’ll be honest and say that I am going to be watching this again because I probably missed some subtleties. It’s also an interesting listen because Mr Townshend has gone from 1 minute timeframes to only using a daily timeframe. He’s also a proponent of keeping trading simple¬†which it seems all really good traders manage to do this. Not surprisingly the principles taught in Van Tharpe’s course and books are very similar to the points Simon makes.

Clive Lambert¬†(author of ‘Candlestick Charts‘)

Honourable final mention for making this topic finally make sense with clear diagrams. Why do 80% of trading books have crappy diagrams that don’t make sense and are too small. These are in colour! Joy! Pay attention to the major ones that are backed by significant psychological meaning then ignore the rest.

So there we are. I hope people are able to benefit from these information sources as much as I have done.

It’s also worth mentioning some of the things I don’t¬†pay attention to…

The ‘NEWS’… I don’t watch it or pay attention to any of it. Why? It’s essentially one huge negative horror story and my being aware of some tragic event or economic storm is not going to help me one bit. If it’s bleeding obvious to me then it’s bleeding obvious to everyone – which means the smart money is figuring a way to make money from the opposite action. I’m not smart enough to play that game ūüėČ Every time I see Robert Peston on TV telling us how bad everything is I honestly want to scream. Really? People were stupid, short sighted and greedy? Again? Oh, you do surprise me! Yes, I am completely shooting the messenger here but that guy is beginning to get on my wick.

Newsletters, tips, other people’s opinions. In my experience best avoided. If you can’t think for yourself and come up with your own ideas then I’d suggest you best not expect others to do it for you. This basically comes down to taking responsibility for your own actions and not relying on a third party to excuse you from your own laziness or lack of discipline. It’s easy to find someone to blame if it’s not you. Getting something wrong is a learning experience. Own it and get better. Don’t just change pundits…