Best Books on Stock Market & Finance📚 Books are always the best way to acquire knowledge even in the presence of latest technologies/e-books/videos.
There are 1000s of books in the market. So I have picked the best ones according to me!
📚 I have sub divided the books to acquire knowledge in any specific field
💲 Finance and Motivation - For knowing more about money and it's fundamentals.
Suitable for - Anyone with the interest to know about money
💲 Technical Analysis - Knowledge about candle sticks and other trading patterns
Suitable for - Anyone with the interest to know the technical analysis done by traders
💲 Fundamental Analysis - Knowledge about the base of a company with it's fundamentals/results
Suitable for - Anyone with the interest to know and analyze fundamentals of companies for investments.
🤔 Pre-requisites - None of the above book require any prior knowledge.
Thank you for viewing book recommendations.
Let me know through the comment section if you have any doubts or feedbacks.
All the best! Happy trading/investing :) 😄
Moneymanagement
Risk per unit (R) & ExpectancyIn this article, we will expand the notions presented in the first part of the series. If you haven’t read the first part, you can check it out below in our related ideas section.
We define risk as to how much you’ll lose per unit of your investment if you are wrong about the position. We called this in the first part initial risk (1R) . All your profits and losses should be related to your initial risk.
Example 1: You buy a stock at $100 and decide to sell it if it drops to $80. What’s your initial risk?
The initial risk is $20 per share. So, in this case, 1R is equal to $20. If you buy 10 shares then your total risk is $200. R represents your initial risk per unit.
Example 2: You want to do a foreign exchange trade with a $10k account, selling the EURUSD. Let’s say that $100 USD is equal to 77 Euros. The minimum unit you must invest is $10,000. You are going to sell if your investment drops by $1k. What is your risk? What’s 1R for you?
It may sound complex, but it is very simple. If you’d close your position if it drops $1k from $10k to $9k, then your initial risk is $1000 and that is equal to 1R.
R represents your initial risk per unit.
Let’s say that you have noted on your trading journal the following trades:
1. 400 CSCO at $23 - R $1000 - P&L $2,317
2. 80 IBM at $80 - R $1000 - P&L ($813)
3. 300 VLO at $50 - R $1000 - P&L $3,413
4. 400 HRB at $51 - R $1000 - P&L ($1,531)
The R multiples for these trades are:
1. 2.32 R
2. -0.81R
3. 3.41R
4. -1.53R
The average R for your system is: 0.84R
Expectancy really refers to the mean (average) R-multiple of your system. As a trader, if you want to be successful you need to start quantifying your trading performance. You should always calculate your R-multiple and it’s average (expectancy).
The expectancy of your system is the average of the R-multiples (both positive and negative) of your system . It tells you what you can expect in terms of R, on average over many trades.
This information is pretty straightforward and easy to grasp. In our example above if we have a system with an expectancy of 0.84R and we risk 1% per trade we should expect a profit of 0,84% per trade. After 100 trades you should be up 84%! The average however is not the total picture!
To understand how much your system can deviate from the expectancy, you must not only know the average R-value, you must also know the variability of R or standard deviation. The variability will tell us how far away from the mean most samples are likely to be. It would be great if all samples were at mean, but this is never the case because it would mean that there is no variability to the sample.
Now you truly understand why the 3rd and 4th golden rules that we mentioned in the first article are very important!
Trade with care.
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Retail play on CapriWhenever there's a chance to get in at a lower price on a stock such as CPRI, we take the opportunity.
Overall retail will perform decently on re-opening theses and people returning to jobs.
R of 1.32 is decent although not the best, but with the potential for it to move, we can set alerts and move Stops to B/E at the alert ray
FCX on commodities/copper againConsidering how this has played out in the past and the current economic environment, we continue to pick our spots to go long copper.
Not the best R ratio but as usual we can make it better once in profit by moving TP up and SL to Breakeven.
The Golden Rule of TradingOne of the fundamentals that every trader must know is how to evaluate the effectiveness of his trading methodology. In this article, we will explore core trading fundamentals that you must follow in order to survive and thrive in this business.
1. Never open a position without knowing the initial risk that you are willing to take. The initial risk is the point at which you will get out of the position to preserve your capital.
Very few people have the psychological makeup to keep a mental stop loss and respect it 100%, that’s why for the rest of us, there is the stop-loss that will automatically close our trade for us at a certain level.
2. Define your profit and loss in your trades as multiples of your initial risk.
These are the R multiples. If your risk is $1000 and you make $3000, you have a 3R win. If your risk is $1000 and you lose $1200, then you have a 1.2R loss. You must start to think in terms of risk/reward.
3. Limit your losses to 1R or less. If you don’t respect the stop loss that you have set and let a losing trade run then you are in real trouble.
This mechanism produces 4R losses or larger and can turn your great system into a losing system very easily.
4. Make sure that your profits, on average, are larger than 1R. Let’s say you have one 5R profit and four 1R losses.
If you add those up you have 5R in profit and 4R in losses, a net gain of 1R. Even though you lost money 80% of your trades, you still made money overall because your average gain was big. This is the power of having an average gain larger than 1R.
What is typically known as the golden rule of trading is a summary of these 4 rules:
“Cut your losses short and let your profits run.”
Here we are talking about doing your best to make sure your losses are 1R or less and that your profits are much bigger than 1R. In 2002, the Nobel prize for Economics was awarded to Daniel Kahneman, a psychologist and economist Amos Tversky for their development of “prospect theory”. This theory when applied to trading/investing showed that people have a natural bias to cut profit short and let their losses run, exactly opposite to the golden rule.
5. Understand your trading system in terms of mean (the average R) and the standard deviation (variability in the results) of your R multiples.
Your system, when you trade it, will generate a number of trades. The result of those trades can be expressed as a multiple of your initial risk or a set of R-multiples. You should know the properties of that distribution for any system that you plan to trade. And the majority of the people who trade the markets never know this. If you spend some time and calculate the mean and the standard deviation of your R multiples, you’ll know a lot about your system and what can you expect from it in the long run.
Trade with care.
If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
AFRM catching the downtrendAgain we're jumping on a trend that has already started so I want to give the reminder that these should have smaller position sizes in your
swing trading strategy.
PTON which was previously one of our longs is one of Affirms bigger customers so you could see how the comps compare to last year.
Another reminder is here at Flightschool we try to emphasize Reward/Risk to get you into swing trades with less hesitation knowing that your losers have a
good chance of being larger than your losers and will help achieve profitability. Therefore, we are not afraid to jump in on a strong trend if it has already started and we
also pay less attention on news and talking points.
GXSBTC seems eager to hug its SMA 200 Guys, haven't you believed in the fact that altcoins following the path to hug their sma 200 eagerly?
GXSBTC is waiting for you to hop in.
COMPUSDTPrice is in the accumulation phase and indicating the uptrend on the higher time frame, there is a higher probability that price can go upside for ATH.
Take the trade based on your trading plan and al always follow the proper risk management to stay consistent profitable.
EURUSD Buy Signal EURUSD Buy Signal
Long positions are 1.67% lower than yesterday and 15.37% higher from last week
USD likely to fall upcoming two days and so next week. EURUSD is at support zone.
plunges nearly 3% off March high– bears vulnerable into support / monthly close
Support objectives eyed at 1.1695 & 1.1.1622 – risk for further losses sub-1.1845
Trading Plan that will help you become consistently profitableIn my trading career beyond having a strategy (actually multiple depending on market state and asset class) to base my trades on nothing has ever been as important as having a Trading plan. In this post I want to share with you my personal trading plan to help you create a set of rules that will help you stick to your plan and keep your emotions in check so that you can actually follow your trading strategy and become a consistently profitable trader.
Something that was and still is key for me is the following realization:
Never get attached to your opinion or view of why something should happen. The market is in fact always right and based on nothing but irrationality since its made by humans so the movements of the market do not have to make sense and at more times then not will not make sense.
Trading is simply a mind game. Markets are a result of mass psychology which leads to exploitable edges. Mastering your own psychology is key to keep following the strategy that defines your edge.
So now without further ado my trading plan template that has helped me so much over the years and I hope will help you as well:
**General Rules**
1. Never enter a trade without a plan (TP,SL)
2. Once you are in a trade stick to the plan
3. Its ok to be wrong its not about being right its about making money
4. Be patient do not act on FOMO
5. Do not chase the market
6. Let your winners run and cut your losses short
**The 5 fundamental truths**
1. Anything can happen.
2. You don't need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
**Rules of consistency**I AM A CONSISTENT WINNER BECAUSE:
1. I objectively identify my edges.
2. I have predefined risk of every trade.
3. I completely accept risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.
**Risk and Money Management**
Do not increase the standard trade size before you doubled the account.
1. The maximum amount you are allowed to lose in a day is $XXX.
2. The maximum amount you are allowed to lose on any single trade is $XXX.
3. The maximum number of losing trades in a row you are allowed to have in a day before you stop trading is three.
4. The maximum number of losing trades you are allowed to have in a day before you stop trading is five. (You may have had a win or two between losses, but there is a time to stop trading.) The maximum number of losing trades in the same direction you are allowed to take in a day before you stop trading is three.
1. If you are up $XXX on a single trade, you will put a profit floor of $XXX underneath the current price to protect a portion of those profits.
2. If you are up $XXX on a single trade, you will take the money and close out the trade.
3. If you are up $XXX for the day, you will take the rest of the day off, stay away from the trading screens, and do something you enjoy doing—other than trading
!4. If you are up $XXX for the month, you will put a profit floor of $XXX underneath the month's profits to protect a portion of those profits. If you are up $XXX for the month, you will take the rest of the month off, stay away from the trading screens, and do something you enjoy doing—other than trading! Take a vacation, sleep late and read books, or do something else fun.
CAD/JPY Trade Explained - 1/8 Risk Reward The CAD has been continuously strong the past few weeks and the JPY has been continuously weak, so we was looking for an opportunity to capitalise on this. because of the fundamental difference we was looking for a long trade with a tight stop loss as we haven't been seeing much exhaustion on this currency and yesterday morning at the London open we saw our opportunity, we saw a full and complete exhaustion to previous area of resistance which is now support, double confirmation on the 15 m timeframe and a bullish engulfing candle on the 1h timeframe. after only a few hours of being in the trade we was able to move our stop loss to entry to give us now a risk free trade that we will manage all the wat to our monthly zone, giving us a risk to reward of 1-8
Capital One loaded with cashCOP scheduled for share buy back
MACD looks sweet and MAs as well
Take Profit Reward to Risk Ration is 2.05 and we will consider trailing it since the winners have been moving way past Profit levels previously set.
GBP/CHF Trade idea we have seen continuous strength in the GBP and consistent weakness in the CHF, so what we will be waiting for on this pair is a minor exhaustion back to previous high and entry confirmation to place a trade with our final take profit at our weekly zone
EUR/JPY LONG IDEA the EUR fundamentally is a +1.2 and the JPY is a -8.3 / fundamentals are to the upside, we see a push breaking our lower level area of sell pressure that will now become buy pressure. so what we are looking for is exhaustion back to this zone then price action and entry confirmation to place a trade up to our next major area of sell pressure. Take profit one is at previous high and when this is hit we will half our trade and move sl to entry.
$XAU/USD (Gold) 1760 retestGold will be testing the 1760 before going into the 1600 levels. If the DXY goes according to my analysis, this will be the perfect set-up for gold!
BNBUSDT Technical AnalysisGreetings,
We have an ascending triangle in the 4H timeframe. You can buy at the specified zone and sell above.
Don't forget money management and setting a stop loss.
Risk of each trade is on your own.
Follow me for more TS.
Cheers :)
AUD USD long idea aud usd going to continue the trend after retesting the key structure level
look for long confirmation and enter buy with your own money management
always remember that patience is the key
NZD/USD good long setupnzd usd broke the very strong resistance level and market is back at that broken structure to retest the broken zone
look for the long confirmations on lower time frames and enter long with your own money management
discipline with patience always pays
patience is the key
BNBUSDT Technical AnalysisGreetings,
In this chart we have an ascending triangle. you can buy at the highlighted location and sell above.
Don't forget money management and setting a stop loss.
Risk of each trade is on your own.
Follow me for more TS.
Cheers
EUR/AUD : Price Action Bearish channel, Price Keeps Falling ! 🔔Welcome back Traders, Investors, and Community!
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Good trading at everyone!
BTC on his way to 55K, and then ?As you can see, this is what I think where BTC could be in some days.
If 42,5K - 44k can't hold, BTC would probably visit 37K - 40K area before making a new ATH.
BTW, the deeper and longer correction to downwards is, the longer this bull market will last with higher ATH.
Leave a like plz :-)
NZD/USD good short idea nzd usd broke the monthly resistance level and going to retest it again
look for bearish confirmation and enter short with your own money management
patience is the key
