Best Day Trading Books - Complete Guide to Day Trading
When successful veteran day traders get together, they sometimes spend a good portion of their conversations about day trading books and discussing day trading technique. While they may tease each other slightly about a particular stock pick or getting out of trade too soon, these traders mostly give each other advice in order to improve. One particularly useful piece of advice is how to get the most out of your day trading books.
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You may be overwhelmed with the various choices in day trading services: hundreds of books and e-books, hundreds of stock picking services, cable news shows, daily market news coverage, seminars, articles, and lots of day trading software. A good place to start is to reread those trading books on your shelf, especially those which are highly regarded by fellow traders.
Here are a few tips to get useful information out of your trading books:
1) Take any technical analysis strategy with a grain of salt. No matter what the author's promises are, always test out the strategy recommendation by back-testing, paper trading (demo trading), and, finally, live trading with a small number of shares or contracts. A good investor would never take a randomly-given stock tip blindly; he would run the suggestion through his filters. The same applies for your day trading!
2) Understand the psychology of what is needed to be successful for your favorite trading time frame and methodology. Just as day trading requires a different mentality than long-term trading, different day trading methods require different mentalities. For example, the old tape-reading, "scalping" style strategies require a different mentality than pure intraday technical strategies on a 15-minute chart. Go back through your books and find those portions of the books that address your preferred day trading style and time frame.
3) Determine if the author actually has traded in recent months. Some authors give dated advice, and this is particularly true for day trading. The industry has been altered so dramatically by the new rules affecting orders, especially on the NYSE. Algorithms, greater attention to the Volume Weighted Average Price (VWAP), and other trading execution changes may have rendered certain day trading techniques obsolete. So make sure that the information you include in your trading reflects the most currently available information, or at least information that most successful day traders would consider to be "timeless!"
Obviously, day trading requires knowledge and skill on several levels. Consider adding these three tips to get the most out of your trading books, and hopefully they will help narrow your focus to the information which will help you become more profitable.
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