futures

Like most others in the day trading world I continue to purchase books that I hope will add to my knowledge of daytrading. I thought this book might provide unique insight into the methods used by market makers in their buy/sell decision making process, but I was disappointed.

My disappointment came in several areas:

1) There were no unique insights. Only information already contained in other books on daytrading was covered.

2) The coverage of important topics such as candlestick charting and technical analysis was superficial at best. The author might have better said that this type of analysis is used by Market Makers and here are titles of books where you can receive thorough coverage of the topic.

3) The charts & diagrams in the book were the worst I have seen in any investment book. It appears larger diagrams were shrunk to fit the page size. Most charts were illegible.

4) This is NOT a book for beginners. The author definitely assumes the reader has more than a basic knowlege of the market and market terms.

In summary, this book says market makers use many different tools to make their trading decisions. In my opinion, none of them are unique, and all of them receive better coverage/explanations in other books.

I credit the author for trying to cover so much ground in one book, but unfortuately other books are needed to really get the education needed in the areas he discusses. Perhaps that is the author' intent? I know that after reading the book I decided it was important to become more familiar with candlestick charting techniques so I purchased Steve Nison's book "Japanese Candlestick Charting Techniques" (also available on Amazon.com).

Lukeman, a market maker at Morgan Stanley Dean Witter, offers up a work that covers a very large spectrum of trading info that is crucial to any investor. The title specifies its utility for day traders, but I found that it would actually be better suited to a momentum or swing trader (active traders, but not as active as day traders). If you are a savvy investor who has already read a number of books on investing techniques, this may not be the book for you. It is a bit basic, but not to the point of "stocks are..." or "bonds are..." Covered topics include risk control, trend spotting, fundamentals, timing and execution, technical analysis such as candlestick patterns, advanced trading tactics, and market psychology. The only complaint that I have about this book is that it lacks nitty gritty details, but it does have some depth. Also, it was a bit disappointing that there was little on actual market maker techniques, with the "dead cat bounce" being as advanced as the book got. But overall, this is an excellent book. If you are a novice and interested in active trading, then this book will give you so much knowledge that can almost guarantee your success. And if you are a very savvy trader, it may pay to pick this up anyway, because it may have one or two jewels that you are unaware of. Highly recommended!

I was hoping to get the inside scoop on how the robber barons, I mean market makers, colluded in nefarious activities to rip off the public. I expected chapters on payment for order flow, trading ahead of large customer orders, surreptitious ECN 100 share orders that refill to infinity, price fixing, holding market orders for 30 minutes then turning the stock price the other way (this actually happened to me once), etc. What I got was a primer for people who don't know what a dead cat bounce or double top is but, nevertheless, think they are smarter than the consensus and want to throw their money at the market.

The section devoted to psychology was excellent. The rest I could have done without. I wonder how market makers can make money nowadays with the spread basically nonexistent in most stocks and the NASD more vigilent on enforcement. Maybe in his next book we will find out.