Three books by real traders from institutions to help you get started on Forex Trading.
Learn from the best market maker and trader at industry-leading foreign exchange banks such as Citi and Nomura.
There are many books that promise to teach you highly profitable trading systems, to show you how easy making money trading the forex really is. This is not one of those books.
At StakeAlpha, we aim to help traders to be consistent and profitable in the long run using proven risk-reward parameters. Instead of giving you the working strategy, we would rather teach you how to find a profitable strategy. Successful traders will be given 100k to trade. Please check us out @ www.stakealpha.com
In this post, we will cover the three most essential books that will help our traders to get funded.
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Book 1: Idea Ideation
“The Art of Currency Trading: A Professional's Guide to the Foreign Exchange Market” by Brent Donnelly
For a comprehensive and updated book on generating trading ideas, please read “The Art of Currency Trading: A Professional's Guide to the Foreign Exchange Market” by Brent Donnelly. Focus on Chapter 5 to 10 as it covers lots of strategies that can be used in the current market.
Brent Donnelly Over the course of his career he has been a market maker, trader, and senior manager at industry-leading foreign exchange banks such as Citi and Nomura and at a major hedge fund in Connecticut.
- Recent Interview with Brent Donnelly by Real Vision.
DO NOT SPEND MONEY ON EXPENSIVE EDUCATION. After interviewing many traders that spent thousands of dollars on Ebooks & Videos, we have come to the conclusion that most gurus out there are just teaching things that you can learn from books or youtube. Not saying that all educators are bad but please check their background and track record.
Below is a list of basic questions before buying any education
How long will it take to make back the money I just spent?
Why is the educator teaching? Is he incentivise by brokers?
What was the track record of the educator?
Was he a trader at a reputable bank?
Book 2: Risk management
“Trade your way to Financial Freedom” by Dr Van Tharp
How to professional trader manage risk? A simple way is to use R Multiples. The R multiple represents the dollar amount that you risked for each trade. Mentioned by Dr Van Tharp in his book, the R multiple is a powerful tool that you can use to accurately track the performance of your trades.
Referring to the EUR/USD chart below, we are assuming to take a 1R risk of (100 pips) with a 2R (200 pips) but decided to take 1.5R Profit to avoid a 1R lost. This is a good example of how to use R to understand risk management on every trade.
R multiple is a way to receive honest feedback on trades across different risk parameters.
Make the shift and think of your results not in terms of how much money you made, but on your R multiple. This method is taught by world-renowned trader Richard Dennis where he used the R Multiple when raising his renown turtle traders. Each morning he gave his trader a slip of paper with the "R of the day," on the amount they are able to risk.
Book 3 : Discipline
“Atomic Habits: Tiny Changes, Remarkable Results” by James Clear
An atomic habit is a regular practise or routine that is not only small and easy to do but is also the source of incredible power; a component of the system of compound growth. Bad habits repeat themselves again and again not because you don't want to change, but because you have the wrong system for change.
This book might not be about trading but our traders find it very useful as it can be applied to everything we do in our life. By only focusing on only profitable setups, traders can consistently make money in the market. Most traders lose money because of they are trading setups that are not proven to be profitable.
By focusing on their best trades, Most of our funded traders have consistent P/L that aim for consistent small gains as they understand the impact of compounding and they will be rewarded with more capital.
Closing Thoughts
We hope that these three books will elevate your trading to another level. Always remember trading is a performance game and there are a lot of similarities between trading and sports. The mentality, the thought process and the preparation that comes with professional sports illustrate nicely how a trader should approach trading and what to do in order to increase trading performance.
Happy trading,
Louis - StakeAlpha
For those that feel that they are ready to enter the market. Please check out StakeAlpha traders incubation program where we are looking for consistent traders to fund with our own capital.
For more detail please reach us at
www.stakealpha.com