A Recommended Reading: Trading

APPENDIX
Recommended
Reading
I have read quite a few investing- and trading-related books over the years
(probably over 200 by now), and this Appendix contains the ones I recom-
mend because they have something really useful to say.
Trading
21 Irrefutable Truths of Trading: A Trader’s Guide to Developing a Mind to Win,
The, by John Hayden (McGraw-Hill, 2000).
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful In-
vesting, by Burton Malkiel (W. W. Norton & Company, 2011).
Beyond Candlesticks: New Japanese Charting Techniques Revealed, by Steve Ni-
son (Wiley, 1994).
Campaign Trading: Tactics and Strategies to Exploit the Markets, by John
Sweeney (Wiley, 1996).
Complete Guide to Building a Successful Trading Business, The, by Paul M. King
(PMKing Trading LLC, 2007).
118 Recommended Reading
Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires,

The, by Michael W. Covel (Harper Paperbacks, 2009).
DayTrading into the Millennium, by Michael Turner (M.P. Turner, 1998).
Education of a Speculator, The, by Victor Niederhoffer (Wiley, 1998).
Electronic Day Trader: Successful Strategies for On-line Trading, The, by Marc
Friedfertig and George West (McGraw-Hill, 2000).
Electronic Day Trading to Win, by Bob Baird and Craig McBurney (Wiley, 1999).
Encyclopedia of Trading Strategies, The, by Jeffrey Owen Katz and Donna L.
McCormick (McGraw-Hill, 2000).
Financial Freedom Through Electronic Day Trading, by Van K. Tharp and Brian
June (McGraw-Hill, 2000).
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, by
Nassim Nicholas Taleb (Random House, 2008).
Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the
Casinos and Wall Street, by William Poundstone (Hill and Wang, 2006).
Hedgehogging, by Barton Biggs (Wiley, 2008).
How I Trade for a Living, by Gary Smith (Wiley, 1999).
Intermarket Analysis: Profiting from Global Market Relationships, by John Murphy
(Wiley, 2004).
Irrational Exuberance, by Robert Shiller (Crown Business, 2006).
Japanese Candlestick Charting Techniques, Second Edition, by Steve Nison
(Prentice Hall, 2001).
Liar’s Poker, by Michael Lewis (W. W. Norton & Company, 2010).
Market Wizards: Interviews with Top Traders, by Jack D. Schwager (Market-
place Books, 2006).
Mastering the Trade: Proven Techniques for Profiting from Intraday and Swing
Trading Setups, by John Carter (McGraw-Hill, 2005).
Mindtraps: Unlocking the Key to Investment Success, by Roland Barach (Interna-
tional Institute of Trading Mastery, 2000).
(Mis)behavior of Markets: A Fractal View of Risk, Ruin, and Reward, The, by Be-
noit Manelbrot and Richard L. Hudson (Basic Books, 2004).
New Market Wizards: Conversations with America’s Top Traders, The, by Jack D.
Schwager (Marketplace Books, 2008).
Protect Your Wealth from the Ravages of Inflation 119
New Thinking in Technical Analysis: Trading Models from the Masters, by Rick
Bensignor (editor) (Bloomberg Press, 2000).
Practical Speculation, by Victor Niederhoffer and Laurel Kenner (Wiley, 2005).
Psychology of Trading: Tools and Techniques for Minding the Markets, The, by
Brett N. Steenbarger (Wiley, 2002).
Reminiscences of a Stock Operator, by Edwin Lefèvre and Roger Lowenstein
(Wiley, 2006).
Rules of the Trade: Indispensable Insights for Online Profits, by David S. Nassar
(McGraw-Hill, 2001).
Running Money: Hedge Fund Honchos, Monster Markets and My Hunt for the Big
Score, by Andy Kessler (HarperCollins, 2004).
Schwager on Futures: Fundamental Analysis, by Steven C. Turner and Jack D.
Schwager (Wiley, 1996).
Schwager on Futures: Technical Analysis, by Jack D. Schwager (Wiley, 1997).
Smarter Trading: Improving Performance in Changing Markets, by Perry Kauf-
man (McGraw-Hill, 1995).
Stock Market Wizards: Interviews with America’s Top Stock Traders, by Jack D.
Schwager (Marketplace Books, 2008).
Strategic Electronic Day Trader, The, by Robert Deel (Wiley, 2000).
Trade Your Way to Financial Freedom, by Van K. Tharp (McGraw-Hill, 2006).
Trader Vic: Methods of a Wall Street Master, by Victor Sperandeo (Wiley, 1993).
Trading in the Zone: Master the Market with Confidence, Discipline and a Win-
ning Attitude, by Mark Douglas (Prentice Hall, 2001).
Trading Systems That Work: Building and Evaluating Effective Trading Systems, by
Thomas Stridsman (McGraw-Hill, 2000).
Trend Following: Learn to Make Millions in Up or Down Markets, by Michael W.
Covel (FT Press, 2009).
Way of the Turtle: The Secret Methods that Turned Ordinary People into Legen-
dary Traders, The, by Curtis Faith (McGraw-Hill, 2007).
What Works in Online Trading, by Mark Etzkorn (Wiley, 2001).
When Genius Failed: The Rise and Fall of Long-Term Capital Management, by
Roger Lowenstein (Random House Trade Paperbacks, 2001).
120 Recommended Reading
Money and Investing

Contrarian Investing: Buy and Sell When Others Won't and Make Money Doing It,
by Anthony Gallea and William Patalon III (Prentice Hall, 1999).
Fiat Paper Money, by Ralph T. Foster (Ralph T. Foster, 2008).
Guerrilla Investing: Winning Strategies for Beating the Wall Street Professionals, by
Peter Siris (Taylor Trade Publishing, 2000).
Investing for Dummies, Fifth Edition, by Eric Tyson (Wiley, 2008).
Investment Gurus: A Road Map to Wealth from the World’s Best Money Manag-
ers, by Peter J. Tanous (Prentice Hall, 1999).
Money Game, The, by Adam Smith (Vintage, 1976).
Money Masters, The, by John Train (HarperBusiness, 1994).
New Rules of Money: 88 Simple Strategies for Financial Success Today, The, by
Ric Edelman (Collins, 1999).
Pied Pipers of Wall Street: How Analysts Sell You Down the River, The, by Ben-
jamin Mark Cole (Bloomberg Press, 2001).
Safe Strategies for Financial Freedom, by Van K. Tharp, D. R. Barton, Jr., and
Steve Sjuggerud (McGraw-Hill, 2004).
Miscellaneous
Art of War, The, by Sun Tzu (translated by Samuel Griffith) (Oxford Univer-
sity Press, 1963).
Black Swan: The Impact of the Highly Improbable, The, by Nassim Nicholas
Taleb (Random House, 2007).
Blink: The Power of Thinking Without Thinking, by Malcolm Gladwell (Back Bay
Books, 2007).
Labyrinths of Reason: Paradox, Puzzles and the Frailty of Knowledge, by William
Poundstone (Anchor, 1989).
Probability Without Tears: A Primer for Non-Mathematicians, by Derek Rown-
tree (Prentice Hall, 1984).
Way of The Warrior-Trader: The Financial Risk-Taker’s Guide to Samurai Courage,
Confidence and Discipline, The, by Richard D. McCall (McGraw-Hill, 1997).
Why Café, The, by John Strelecky (Aspen Light Publishing, 2011).
APPENDIX
Useful
Resources
While this list of resources may look a bit sparse, I’ve cut it down to only
the really useful resources I use all the time, rather than including a huge list
of everything to do with money and investing online.
Trading and Investments

pmkingtrading.com
finance.yahoo.com
Precious Metals
www.goldmoney.com
globalgold.ch
www.perthmint.com.au
bullionvault.com
122 Useful Resources
Brokers
interactivebrokers.com
Economics and Statistics

www.shadowstats.com
www.tradingeconomics.com
www.economist.com
Currency Interest Rates and Consumer

Price Indexes
AUD: www.abs.gov.au
CAD: www.statcan.gc.ca
CHF: www.bfs.admin.ch
EUR: epp.eurostat.ec.europa.eu
GBP: www.statistics.gov.uk
HKD: www.censtatd.gov.hk
JPY: www.e-stat.go.jp
NZD: www.rbnz.govt.nz
SEK: www.scb.se
USD: www.bls.gov
Products
qmatix.com
tradingblox.com
office.microsoft.com
I
Index
British pound, 53, 110
A capital allocation, 55
Acceptable real rate of return, 51 currency holdings after
Assets purchase, 56
definition, 2 FX account
increase in, 5 after rebalancing, 61
ideal and actual allocations
Australian dollar, 53, 54, 110 of, 60
capital allocation, 55 inflation rate, 53
currency holdings after interest rate, 53
purchase, 56 positive real interest rate
FX account environment, 54
after rebalancing, 61 real rate of return, 53
ideal and actual allocations, 60
inflation rate, 53 Brokerage account, 45
interest rate, 53 Bullion Vault Company, 44
positive real interest rate Buy-and-hold strategy, 110–112
environment, 54
real rate of return, 53
C
CAGR. See Compound annual
B growth rate
Balance sheet
Canadian dollar, 53, 110
definition, 2
capital allocation, 55
Miss Borderline, 3
currency holdings after
Mr. and Mrs. Fit, 4
purchase, 56
Mr. and Mrs. Unfit, 2
FX account
Bank, definition of, 48 after rebalancing, 61
Base currency, 57, 58 ideal and actual allocations
of, 60
Basket of commodities, 19
inflation rate, 53
Benchmark rate, 54
124 Index
interest rate, 53 Discretionary expenses, 9

positive real interest rate Dollar cost averaging, 32, 111
environment, 54
Drawdown (DD), 30
Dreyfus (WisdomTree), 59
Capital
allocation, for currencies, 55
gains, 46 E
gains tax, 45 EFA
implementation of, 14 annual rebalancing of, 34
objectives and types, 14 ETF allocation, 33
Cash flow statement, 6 Emergency fund, 14, 39
expenses, reduction of, 9 creation, 108
income, increase in, 8 establishment, Mr. & Mrs. Fit, 46
Miss Borderline, 7 objective, 109
Mr. and Mrs. Fit, 7 purchasing power protection, 39
Mr. and Mrs. Unfit, 6 alternative solution, 47
Cash rebalancing method, 57 increasing emergency fund, 40
Certificate of deposit (CD), 52 precious metals, investment
on, 41
Compound annual growth rate
(CAGR), 16, 17, 71–73 ETFs. See Exchange-traded funds
Consumer Price Index (CPI), 24 Euro, 53, 110

capital allocation, 55
Consumer Price Index for All Urban currency holdings after
Consumers (CPI-U), 15, 16 purchase, 56
Counterfeiting, 22 FX account
CPI-U. See Consumer Price Index for after rebalancing, 61
All Urban Consumers ideal and actual allocations
of, 60
Currency inflation rate, 53
allocation of 100,000 US dollars, 56 interest rate, 53
devaluation, 23, 49 positive real interest rate
real rate of return on, 53 environment, 54
rebalancing, 67 real rate of return, 53
trading, peculiarities of, 58
types of, 53 Everbank, 57
units, supply of, 22 Exchange-traded funds (ETFs), 15,
weighting, 55 30, 59
allocation, 33
inverse fund, 88, 91, 92
D liquid, 90, 91
DD. See Drawdown noncorrelated, 90
Defunct currency, 113 ranked by volume, 88–90
rebalancing, 67
Devaluation of currency. See
ultra-short fund, 92
Currency, devaluation
Index 125
Expenses
discretionary, 9
H
mandatory, 9 "Hedonic quality adjustment”, 25
reduction of, 7, 9 HELOC. See Home equity line of
credit
F Holding. See GoldMoney holdings
FARCE strategy, 111, 112 Home equity line of credit (HELOC),
48, 108
Fiat (by decree)
counter-feiting, 22 Hong Kong dollar, 53, 110
currency, 22 capital allocation, 55
paper currency, 43, 45, 47 currency holdings after
purchase, 57
Financial fitness, 1, 13
FX account
achievement, 107
after rebalancing, 61
balance sheet, 2 ideal and actual allocations, 60
cash flow statement, 6 inflation rate, 53
meaning of, 1 interest rate, 53
Financial meltdown, 114 positive real interest rate
Financial nightmare, 10 environment, 54
Fiscal policy, 21, 22
Foreign currency, 52
Foreign exchange (FX) trade,
I
57–59 IB. See Interactive brokers
after rebalancing, 61 Income
ideal and actual allocations, 60 characteristics, 8
increase, 7, 8
G Individual retirement account (IRA),
69
Global Gold Company, 44
Inertia, 81
Gold (GLD)
Australian dollars, price in, 43 Inflation
control, 110 Consumer Price Index, 24
dollar allocation, 63, 64 definition, 15
ETF recommendation, 62 financial fitness, 13
GoldMoney, 44, 109, 113 inevitability of, 22
investment on, 41 MAR ratio, 35
and oil ratio, 37 negative real interest rates, 15
prices in dollars, 36 purchasing power, 15
savings account funding, 109 rates, on currencies, 53
standard, 22 responsibility, 28
vs. US dollar, 47 market performance, 30
Mr. and Mrs. Fit, seeking
GoldMoney holdings, 45 financial advice, 29
single-currency problem, 26
126 Index
Inflation-proof emergency fund, 42 exit strategy, 101–103

Interactive brokers (IB), 57 financial spending, 86
instrument filter (see
Interest rates, on currencies, 53 Exchange-traded funds)
International currency, 109 market selection, 88
NLV, 97, 98
Inverse bond funds, 61, 64
no annual fee, 85–87
Inverse Treasury Bonds (TBT), 62, risk per trade, 100, 101
64, 110 risk per share calculation, 98
Investment account, 14 setup condition, 93
true range, 94
Investment account management,
volatility, 98
69, 111
XLQ, 97
construction of investment, 70
FARCE avoidance, 77 Investment portfolio ETFs, 113
IRA, 69 iShares Trust Barclays 20+ Year
Mr. and Mrs. Fit Treasury Bond Fund, 62
portfolio managers. See
Portfolio management
visit a casino, 75–77 J
risk adjustment, 70 Japanese yen, 53, 110
risk and return measurement, 70 capital allocation, 55
CAGR calculation, 71, 72 currency holdings after
drawdown (DD) purchase, 57
percentage, 73 FX account
MAR ratio, 73 after rebalancing, 61
performance achievement, 74 ideal and actual allocations, 60
periodic value, 73 inflation rate, 53
return value, 71 interest rate, 53
uncontrolled risk, 74 positive real interest rate
risk minimization, 75 environment, 54
ROI, 75 real rate of return, 53
trading vs. investment, 78
annual rebalancing, 83, 84
buy and hold investor, 79 L
entry signal, 81, 82 Liabilities
exit strategy, 78, 82, 83 decrease in, 5
instrument filter, 80 definition, 2
market selection, 79
position-sizing method, 82 Liquidity, migration of, 113
rebalancing portfolio, 78 Low/negative real interest rate
setup conditions, 81 environment, 61
six components, 78
trend capturing
2% annual fee, 84, 85 M
average true range (ATR), 94, Managed Account Reports (MARs)
96, 97 ratio, 31, 35
capital efficiency, 99
Index 127
Mandatory expenses, 9 Platinum (PPLT)

Market performance, 30 control, 110
dollar allocation, 64
Momentum, 81
ETF recommendation, 62
Monetary policy, 21 investment on, 41
Money supply, factors affecting, 22 savings account funding, 109
Portfolio management
N brokerage account, 104, 105
ETF and poor performance, 104
Negative net worth, 2 skills acquisition, 104
Negative real interest rate statistics, 105
environment, 52, 54, 61 Positive net worth, 2
reduction in, 15
Positive real interest rate
Negative real rate of return, 26 environment, 52, 54
Net capital gain, 45 Precious metal(s)
Net cash flow calculation, 6 ETFs, 109
Net liquidation value (NLV), 97, 98 holdings of, 45
investment companies, 44
Net worth, 2
investment on, 41
New Zealand dollar, 53, 110 emergency fund
capital allocation, 55 establishment, of Mr. & Mrs.
currency holdings after Fit, 46
purchase, 57 Gold vs. US dollar, 47
FX account GoldMoney, working of, 45
after rebalancing, 61 inflation-proof emergency
ideal and actual fund, 42
allocations, 60 practical problems, 43
inflation rate, 53 owing, 112
interest rate, 53 Price inflation, 15, 21, 39
positive real interest rate
Procrastination, 107
environment, 55
brokers going out of business, 114
defunct currency, 113
emergency fund creation, 108
P financial fitness achievement, 107
Palladium (PALL) financial meltdown, 114
control, 110 GoldMoney, 113
dollar allocation, 63, 64 investment account management,
ETF recommendation, 62 111
investment on, 41 investment portfolio ETFs,
savings account funding, 109 existence of, 113
owing precious metals, 112
Passive income, 8
precious metals ETFs, existence
Periodic rebalancing, 35 of, 113
Perth Mint, 44 savings account, funding of, 109
128 Index
Purchasing power positive real interest rate

emergency fund environment, 54
maintenance, 40 currency trading, peculiarities
protection, 39 of, 58
reduction in, 15 Scalable income, 8
Silver (SLV)
Q control, 110
Quote currency, 58 dollar allocation, 63, 64
ETF recommendation, 62
investment on, 41
R savings account funding, 109
Rake, 75
Single-currency problem, 26
Random walk strategy, 117
Single-currency risk, 26
Real rate of return
Smart money, 42
on currencies, 53
definition, 52 Sound investment, 31
Rebalancing model curriencies vs. SPY, 33
ETFs, 67 annual rebalancing of, 34
S&P 500 dollar cost averaging, 32
Recommended reading, 117, 121
S&P 500 investment return, 31
money and investment, 120
probability, 120 Swedish krona, 53, 110
trading, 117–119 capital allocation, 55
Recurring income, 9
purchase, 57
Repeatable income, 9 FX account
Return on investment (ROI), 75 after rebalancing, 61
in TIP, 17 ideal and actual allocations, 60
in TLT, 18 inflation rate, 53
interest rate, 53
Risk-adjusted return, 66
positive real interest rate
Rydex (CurrencyShares), 59 environment, 55
S Swiss franc, 53, 110
S&P 500 capital allocation, 55
index, 112 currency holdings after
investment return, 30, 31 purchase, 57
Savings account FX account
funding of, 109 after rebalancing, 61
objective, 14 ideal and actual allocations, 60
inflation rate, 53
Savings and working capital, 51 interest rate, 53
acceptable real rate of return, 51 positive real interest rate
historical results, 65 environment, 55
low/negative real interest rate real rate of return, 53
environment, 61
Index 129
FX account
T after rebalancing, 61
TBT, 62, 63 ideal and actual allocations, 60
Time-for-money income, 8 vs. Gold, 47
TIP security. See Treasury Inflation Index, 27
Protected (TIP) security inflation rate, 53
interest rate, 53
TLT, 33, 62, 63 positive real interest rate
annual rebalancing of, 34 environment, 55
return on investment in, 18 real rate of return, 53
Trading Blox, 66 Useful online resources
Treasury Inflation Protected (TIP) consumer price index, 122
security economics and statistics, 122
ETF, 15, 16, 110 interactive brokers, 122
return on investment in, 17 interest rate, currency, 122
savings and working capital, 62 precious metals, 121
US dollar allocation, 64 products, 122
trading and investment, 121
U
United States (US) dollar, 53, 64, 110 Z
capital allocation, 55 Zero percent tax bracket, 17
purchase, 57

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APPENDIX

Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires,

Money and Investing

Trading and Investments

Economics and Statistics

Currency Interest Rates and Consumer

interest rate, 53 Discretionary expenses, 9

Consumer Price Index (CPI), 24 Euro, 53, 110

Inflation-proof emergency fund, 42 exit strategy, 101–103

Mandatory expenses, 9 Platinum (PPLT)

Purchasing power positive real interest rate

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