For Canadians, you may want to order this online from Chapters/Indigo, (see the link). Currently selling at a discounted price of $20.

http://tinyurl.com/29t8pw

Bill, The link to the book should be:

http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470171499.html
It would be nice to see a table of contents somewhere. I couldn't see it on Amazon either.

Thanks Bill,
Sounds like a good read. Cheers

Here's a link to amazon.ca which has the delivered cost of the book a few dollars less than indigo which is a few bucks cheaper than Wiley.

fwiw

http://tinyurl.com/2lqmek

Costed a couple of bucks more on Amazon US than on Amazon CA - have we really fallen THAT far?

Reminds me of the 70's, when I once tried to pay US$ in Ecuador (now dollarized!) but was asked if I didn't have any German marks ...

Maybe I can get back on top by day trading!

I just ordered it from amazon.ca. Looking forward to reading it and the opportunity to discuss it. Thanks!

I don't like the part of the title "for Dummies"
However I plan to order one just because Bill recommended it.

The Best deal is buy.com using Google Checkout

http://www.buy.com/prod/day-trading-for-dummies/q/loc/106/204700138.html

Actually, I hope staring at the title between trades will make me less DUMB ...

Hello, long-time lurker and first-time poster at Bill Cara's, I hope to break this trend today.

As of this Tuesday (10/30) I have just recently taken the plunge, retiring from my corporate job to follow my passion of studying capital markets and becoming a day trader and investor. One small caveat is that I'm 24 years old. However, through some maniacal focus and denial through my teenage years, good fortune, and being in the right sector(s) at the right time, I've managed to bring my liquid net worth to ~$400,000.

My problem is that my risk tolerance is extremely high (good example is that I was "all in" on KRY from Feb to May of this year (this will probably paint a picture for the community), my diversification is almost non-existent, and I don't have a formalized system by which I execute my buy/sell orders, though I do use some fundamental and technical indicators. At some point I need to pull in the reins and begin trading like a person that can thrive in all types of markets. What advice and/or wisdom would you depart to an individual such as myself who is relatively new to trading (6 yrs), a bit too brash and cocky, does not diversify nearly enough, and has never seen a severe market correction and/or depression as a result of his inexperience?

Congratulations on your book, I am looking forward to reading it.

Regards,
Bitenose

(my apologies, I can't seem to get my text to break lines, so it looks like one jumbled paragraph from the preview window)

Wow, talk about timing, this fits in perfect with where I am at. I am just getting started in trading and plan to come here often, would love to see this develop into a core group of newbie traders working together with guidance from Bill and Ann. If we work really hard maybe we can give the 'turtles' a run for their money, so to speak.

One word of CAUTION, 'Trading for Dummies' IS NOT 'Day Trading for Dummies' I saw the first on my book shelf and thought neat, I already have it. But on further review they are two separate books, the first is written by Griffis and Epstein, I will pick Ann's book this weekend and report back next week with thoughts and questions.

Ann:

Re the "first year failure rate of 80%.."

Not having read the book, can't say whether I agree with how that number was derived. My reason for weighing in, however, is to point out that although day trading may deserve the negative connotations that surround it, I think there's a place for it. Wasn't much of a day trader until the spring of 2007, when market direction (at least for me) became a toss-up. Trading the back and forth amidst the topping process seemed to work for me. I don't advocate it as a primary trading tool, and don't personally know anyone who endorses it as a profession. Previously responded to a (somewhat) disparaging post that D-A-Y-T-R-A-D-E does NOT spell D-I-S-R-E-S-P-E-C-T...I don't argue with what works (for me) in a given situation, nor would I "dis" the use of any technique that helps someone else play the "game."

Look forward to reading your book ;)

Hi, everyone! I'm here to take any questions you have.

And yes, the good folks at Wiley have several different trading and technical analysis books under the Dummies brand, to cover anything you could possibly want to know. I'm all right with the "for Dummies" in the title, because even if that means that some of the books are sold in jest, that's still more copies out there. (I'm convinced that "Hedge Funds for Dummies" was the Wall Street gag gift in December 2006.)

As for the day trading failure rate study: There isn't a lot of research out there. The paper that I cited used data in Taiwan and was written by a group led by Terence Odean at the University of California - Berkeley. You can find the paper here: http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trade%20040330.pdf

Anecdotally, I talked to some brokers who deal with day traders, and they said that a huge challenge for them is figuring out ways for their customers to succeed, because they lose so many. Not all give up trading entirely; two of the day traders that I interviewed while I was writing "Day Trading for Dummies" have since taken trading jobs with big investment companies.

What else can I tell you?

Annie Logue

Bitenose asked for advice on getting started - the best piece of advice I have is to approach this as you would any new business. You need to sit down and think about what you want to trade and how. How many hours a day do you want to trade? What limits do you want to set for yourself? How much will you risk per trade, and how much will you risk per day? What broker and what research services make the most sense for your trading style? When will you give yourself a break?

Also, it's a good idea to keep a diary of all of your trades, at least early on, so that you can track what you did right and what you did wrong.

The problem that many traders run into isn't their system, it's their psychology. The markets can be brutal, and if you are going to face them every day, it helps to have a plan of action so that you have a lot of control over what you are doing.

Finally, have a backup computer! It's a long story, but my laptop is currently overloaded with spyware. If I were day trading from it, that would ruin my day. Because I use it only for work out of the office, it's just a hassle.

Annie Logue

What a timely topic.

In the back of my mind, I have been thinking about day trading for a living. It is something that I am targeting for July 1, 2008, as I would like to leave my current job by that time for trading freedom. Presently I am trying to master trades of 30 to 90 days before I dive in. And thanks to this blog I am doing very well so far. The plan is not to trade 8 hours a day, 5 days a week. For me trading is something that has no retirement, no boss, no fixed hours, no commute and is something that can be done anywhere in the world. I marvel at the technology available to the trader today. These are aspects of independent trading that I like.

I reserved the following book "Financial freedom through electronic day trading" by Van K. Tharp (who has been mentioned several times in this blog) at my library. When I picked it up today it was well used, in several pieces and marked up with notes from previous borrowers. Currently, I am reading one of his other books "Safe strategies for financial freedom". This is one to like as the jacket states: "Get smart about your money and retire in five years OR SOONER".

His writing was obscure to me when I previously read some of his articles. This time around I am finding that this book makes a lot of sense. The reason being that the depth of information in this blog has made me understand what he is writing about. I will certainly give Annie's book a read after I finish this book on day trading.

This Saturday I will be back to the Metro Toronto Convention Centre for a full day of investing and trading education. The speakers at this event include John Bollinger, Steve Nison, Adrienne Toghraie, Martin J. Pring and Larry Levin. I hope this will be an inspiration to become a day trader.

----
I agree with Annie's post above to Bitenose. This is excellent advice. It is all about psychology. But the failure rate does worry me.

Some questions I have: What environment do successful traders find best. Working from home or from an outside office (my preference). Where does one find a mentor for day trading? I believe you need a coach along the way.

Lastly, can trading on your own be successful? I would think that trading with other like-minded individuals would be preferable to me. In this light, are there traders who are on their own but trading with others by using VOIP or chat systems? Some trading banter with others during the day seems important to me. [021]

BernardF, I suspect that may be part of the reason for the burnout rate - it gets lonely! In Chicago and New York, and possibly a few other cities, there are trading arcades where traders can rent office space to work. Some offer coaching, some loan capital, some are trying out people for their prop desk, and some simply offer infrastructure and human company. There are fewer of these than there used to be, though. At one time, it was almost impossible to get a high-speed data line at home, but those days are long gone. The Chicago Mercantile Exchange has a trading arcade directory; most, but not all, of the firms in it are in Chicago: http://www.cme.com/files/CMEGroupPropTradingFirm2007.pdf

There are a lot of chat rooms and message boards for traders, but you need to investigate them carefully. Some are great, some are dominated by shills, and some have a lot of nervous newbie traders bringing everyone down instead of up.

Likewise, there are great coaches, and there are people who just want to suck your money selling you yet another piece to their system. Check references. Many work by phone or by chat. The Chicago Board of Trade maintains a list of some coaching and training firms at http://www.cbot.com/cbot/pub/page/0,3181,1130,00.html, most of these specialize in commodities, but not all do.

Annie Logue

Dear Annie,
I tried to purchase your book at Chapters here in Toronto and it seems it is not available anywhere in Ontario! Online here I come!
I do have one question though: is your definition of Day Trading that you have to close out all positions at the end of the day? If so, are there any exceptions within that definition?
I am sure this question is answered in your book but I can't wait. Thanks

Hi, Yaba,

Yes, I define day trading as closing out at the end of the day. It's a tight definition. True day trading reduces certain types of risk, because you don't have to deal with things moving against you when you aren't at your desk (a frequent occurrence in a 24-hour global market). But it doesn't always make sense, and many of the day traders that I talked to hold certain positions for several days. In fact, if you are trading anything that is still traded in the pit, you might be better off swing trading those - having a time horizon of several days to several weeks - because the human traders on the floor sometimes cause odd price gyrations. With less floor trading, this will become less of an issue.

In the book, I talk a little about swing trading, and even long-term investing, because some readers will want that information as they figure out how best to take up trading.

Annie Logue

Brett Steenbarger's TraderFeed blog entry Nov. 2 -- "So You Want To Trade For A Living".

http://tinyurl.com/26rfg7

Annie's advice to bitenose -- "...the best piece of advice I have is to approach this as you would any new business. You need to sit down and think about what you want to trade and how. How many hours a day do you want to trade? What limits do you want to set for yourself? How much will you risk per trade, and how much will you risk per day? What broker and what research services make the most sense for your trading style? When will you give yourself a break?"

Steenbarger is on the same page in a different book -- "The bottom line is that starting a trading career truly is starting an entrepreneurial business. The same dynamics that lead to success in startup firms--from knowing your markets to having a solid plan to being well capitalized to executing on details--apply to aspiring traders. If you can approach trading with the mindset, work ethic, and creativity of a successful entrepreneur, you have a real shot. And that's what entrepreneurs live for."

Annie, thanks to both you & Bill for the practical valuable advice and reasoned common sense. Much appreciated!