A necessary disclaimer: we have received a complimentary copy of the book from its author, so the review may be biased due to that.
Momo Traders: Tips, Tricks, and Strategies from Ten Top Traders is a book about successful day traders in stock markets. It was written by Brady Dahl and
Nathan Michaud (Nate) is a
One of the book's selling point is that a part of its sales' proceeds will go to Traders4ACause — a
The book was a pleasant read although it would be much more fun and enlightening if it would be about currency trading instead of stocks. Yet there are things to learn from experience of successful people in a slightly different area too. We would point out the following ideas to dwell upon if you are an FX trader:
The book is quite repetitive despite being composed mainly of the thoughts and opinions of ten different people. By the end of the book (8th and 9th interview for us), you will be able to guess what the answer will be to four out of five questions. Perhaps, it is because the traders come from the same online community, but it really makes a big part of reading quite uninformative.
It seems like every trader is lacking in fundamental analysis field and is planning to learn it someday but doesn't do it for this or that reason. All of the interviewees have three to five monitors on their desk to analyze stocks. And most of them seem to be full of scorn for Twitter gurus.
That would not be much of an issue had there been more diversity in the questions that Brady asked. At the same time, that could have been intentional to make the similarities between successful traders to stand out for us.
The book uses a lot of jargon specific to trading in equities. Even if you are fluent in Forex trading terms, the chances are that you will have a hard time understanding some of the book's lingo. That is why you might find the list of some of the important terms along with their definitions useful:
10-Q — a quarterly report filed with the SEC by publicly traded companies.
After hours — a low liquidity limited stock trading session between 16:00 and 18:30 EST, just after the market closes.
Boxing — going long and short on the same stock simultaneously (akin to Forex hedging). It enables a trader to go net short when there is no short liquidity available but ties up more capital (double amount) and drains more trading fees.
Filing — a filing of public company's financial statement with the SEC. Contains important data on the company.
Momo — momentum trading or someone who engages in momentum trading.
Montage — a display of some trading data in the trading or charting software.
OTC market — an
Parabolic move — stock rallying up akin to the right wing of a parabola. Usually, this happens when some
Pattern day trader rule — a set of rules imposed by FINRA on traders who execute at least 4 intraday stock trades within 5 business days on margin account. Enacted on February 27, 2001, it requires such traders to keep at least $25,000 equity in their accounts and respond to margin calls in timely manner. The SEC does a very good job explaining it.
PR — a press release about a public company, containing some information pertaining to that company.
Premarket — a low liquidity limited stock trading session between 8:00 and 9:30 EST, just before the market opens.
Promotion, promoter — some stocks are getting hyped up to inflate their value, usually as a part of a pump and dump scheme.
Pump and dump — a stock trading fraud when a promoter 'pumps' the price by heavily advertising it with false or misleading statements and then 'dumps' it when enough victims have bought the stock. Usually, the scheme operator promotes the stock via email spam or through social networks.
Scan, scanner, scanning — automated alerts based on indicators. Usually, scanners use
T+3 — trade date plus three days — an execution model that requires the contract to be settled in no more than three days following its purchase. In stock trading, it means that a position opened as T+3 should be closed within 3 days after opening. Since September 5, 2017, T+2 is used instead of T+3 in stocks.
Some of the book's disadvantages that need to be mentioned to balance out this review:
Should you buy this book? If you are already interested in day trading stocks or if you are planning to diversify from Forex trading, then this book can surely help set you on a right path. However, if you are a currency trader who does not look forward to venturing into other financial trading niches, Momo Traders will be of little use to you. Yet you may like reading it for general education.
If you have any questions, comments, or opinion regarding Momo Traders by Brady Dahl, please feel free to discuss it on our Forex forum.
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