Stocks and trading books
This is a gem that encompasses investor psychology and system construction. There is something for everyone in this book. The Intelligent Investor Author: Currently in its tenth edition, this book is a great first read for those starting a portfolio. Indexing, diversification, trends, bubbles, the value of patience coupled with time, alongside many more core concepts are all pronounced within.
Author Jack Bogle is the founder of The Vanguard Group, known for providing the lowest cost funds in industry. The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor Author: Using his Oaktree Capital client memos as a foundation, Howard assembled a collection of the 21 most important things to know about investing.
Explores the basic principles of investing in the stock market. An interesting, though perhaps not profitable, narrative of how Wall Street works. Other Michael Lewis great reads: Inside the Doomsday Machine and Flash Boys. Alchemy of Finance Author: The book may be a bit dense but it is rewarding for those who are willing to finish it.
Fooled by Randomness Author: For traders, this would imply that risks are usually large than we expect. Japanese Candlestick Charting Techniques Author: This book introduces candlestick charting, which some investors may find useful in their trading.
It sure helps to make charts more visual! Tulipomania, the South Sea bubble and the Mississipi Land scheme are covered in this book, showing how herd mentality worked to create bubbles in past eras. It may serve as an interesting read as well as a guide for dealing with future bubbles.
Common Stocks and Uncommon Profits Author: Any trader managing serious amounts of money or trading for others will have these on their bookshelf. When it comes to the all-time classic trading books, we like the ones that have a mixture of technique, structure, mindset and plenty of trading ideas. You see, many of us know how to trade. We have our own trading systems and implement in the market on a daily basis.
This is what our number 1 best trading book to recommend is the Market Wizards series by Jack Schwager. There is no better way to get hundreds of trade ideas except by interviewing the smartest traders of all-time.
You also need to consider how many ideas will help save you from ruin. As a keen golfer, I know the importance of avoiding disaster around a golf course. The worst shot a golfer can hit is Out of Bounds. This is the worst shot as you have to play your shot back on the tee and you drop as shot. It is a full 2-shot penalty. Letting a stop loss run and hoping it will come back is the equivalent of the worst mistake you can make. You just never know how long a position will run against you.
When reading the best trading books, you will hear time and time again how the best traders wiped out accounts in their early years while waiting for a miraculous turn-around. These categories represent the best value for your time. But when starting out, you are best focusing your attention on what we call the top three trading book categories.
Here you will find the best books to help you improve with your trading the most. The reasons why this category comes in at number 1 is because the greatest number of traders focus on technical analysis.
Even if you hate the idea of using technical analysis, you must understand how others use it to find an edge with your trading. Let me explain a little further. As a fundamental trader, it pays to understand where the key technical levels are, even if you are not using them.
When you combine both fundamentals and technicals, you will greatly improve your chances of success in the market. The reason being is every decision you make is based on your thoughts and mindset around it. The system you created is based on everything you have taken in around the markets up to this point in time. Have you ever read a classic trading book for a second time years later?
While reading it, did you ever get the feeling it was a completely different book? The reason the book feels like a new one is because you have changed as a trader. You have made mistakes. You have closed out some of your best trades.
Most new traders begin their journey as a long-term buy and hold investor. Some years, the buy and hold approach works wonders. Other years, the volatility in the markets favours the short term trader.
Swing trading is one of the best ways for longer term investors to make the transition into more active trading. The time frames are more active, but they do not involve buying and selling times per day, as a good day trader might. The beauty of reading the best swing trading books is the number of trading techniques they offer. You see, trading ideas are extremely valuable when you are starting out.
You are always best learning from those people and techniques which have a proven track record. There are literally thousands of solid swing traders out there and many of them have written some of the best trading books available. You must collect a few of the best swing trading books and study them. You will never run out of trading ideas if you do this.
Before we get to our top 8 best trading books, here are the 11 trading categories we have divided our best books into. Just click on each link to find out more about the best books in the section.