-------SUCCESSFUL SPECULATION BEGINS WITH OBJECTIVE OBSERVATION-------

Tuesday, September 30, 2008

Top Ten Trading Books Ever Written

Ed Dobson is a trader and owner of TRADER'S PRESS, a financial bookstore which operates online and at tradeshows through out the country. He just reviewed my book and I am honored to have my book included in his "top ten trading books ever written." Below is his review.

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Book Review of: Technical Analysis Using Multiple Time Frames
Author(s): Shannon, Brian

One of my favorite actors (Al Pacino) said in one of my favorite movies (The Scent of a Woman) “I’ve been around, y’know!” I might modestly say that I too have “been around” books and literature on trading for a long time, almost fifty years….and have literally read hundreds of books on the subject. The majority of them fall into the category of SSDD (same stuff, different day)….and I’ll confess that it takes something truly new and unusual to impress me. Brian Shannon’s new book, Technical Analysis Using Multiple Time Frames not only impresses me, it earns a place in my “top 10 trading books ever written” list.

I’ve had the pleasure of meeting Brian at a number of trading seminars and discussing his approach to trading. Long before his book came out, he impressed me as a particularly savvy trader with a wealth of knowledge well worth listening to…again, a rare situation. His book corroborates this early opinion of him, and represents a valuable contribution to trading literature. It expands greatly on some of the ideas on another old favorite of mine (Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets), adds valuable and detailed insights into the psychology of market participants, gives greatly detailed guidance on the specifics of how he trades, and emphasizes the most important elements necessary to achieve success in trading (discipline, detailed plan, removing emotion for decision making, and many others). A book from a “real trader” is worth far more, in my estimation, than one that is written from the “safety of the sidelines”. And this is one of the best that I have seen.

Perhaps the reason I like this book so much is that it mirrors closely my own beliefs on trading, which were gleaned and formulated over many years. Dominant themes throughout the book include the fact that price is the most important factor to consider, nothing else (even volume, which often expands after price moves, not before); that one must trade only what one sees, not what one thinks; the supreme importance of avoiding large losses and protecting capital; how one should listen only to the market and to price action, never to opinions; and perhaps most importantly, that in order to have the odds in one’s favor, one must trade with the prevailing trend (and not just the major trend, but the intermediate and minor trend as well).

Perhaps the most significant and important contribution of this book is the detailed manner in which the reader is shown how to enter and exit trades just at the moment when they should begin “working”, and not a moment sooner, thus permitting very close protective stops, which minimizes risk to trading capital. Shannon describes himself as a momentum trader, and takes positions only when all timeframes are in alignment with each other, from long term charts down to a 10 minute intraday chart. This is the first, and I believe the only book which offers concrete guidance in precisely how to correlate multiple time frames in order to fine tune trades with a high probability of success and a low risk.

Many “good” books on trading are “dry”, boring, and difficult reading. This one is easy and entertaining to read, clearly written, and replete with sound trading advice and “nifty” sayings that are easy to remember (“from failed moves come big moves”; “Human nature is the only constant in an environment constantly in a state of flux”; “risk is your constant companion”; “discipline and patience are your friends, emotions are the enemy”). The detailed descriptions of “stage analysis” and the psychology of market participants as price patterns unfold are well done.

If you are a long term, value oriented investor who reads 10-K’s and balance sheets, and selects stocks based on PE’s, book value, and other fundamentals, I doubt this book will hold much value for you. But if you are a focused, serious short term trader, it may just prove to be one of the most valuable books you ever read.

Review by Edward Dobson
President, Traders Press Inc.


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