Books that will help you trade wisely

Friends ,

Im writing this post for the non-day traders.

First some warning:
Before buying ANY book recommended on any web site, it is better to get its user review's(one way to do this will be to check out the book at online web site like Amazon.com and read what people have to say about the book). Amazon rates its based on user votes. Preferrably buy only those books which have 4 star ratings.

Now some ground rules:
I would like to break down the recommended listing of books as per the current understanding level of the reader(or his current stage). Here im recommending the set of books which i personally feel would help all you budding Analyst's or traders.

Here we go ......
Belive me, at the end of the day, Technical Analysis is not as tough as it is made out to be. Just using some common sense & a level head, and applying a few good/common rules should help any position trader any time. I belive in the KISS strategy (keep It Simple Stupid). Understand the basics, keep a simple strategy and trade with your head (and not your heart). I again repeat, dont complicate things. Work with the strategy that is working for you (atleast dont discard it day one for another strategy). Dont listen to TV or people. Always use your head and make a decission. At the worst you will loose money which will make you sit up and sort out the mistakes in your trade.

But people somehow are led to belive that using advanced technical indicators will somehow enhance their stock picks. They invariably complicate the whole process beyond its worth.

Im sure many would pounce on me for making this statement but just think about it. Well known traders in past never had the sophisticated tools that we have at our disposal today. So my list is geared towards the simple and effective ways of stock picking.


Stage 1- Traders Mindset: This stage constitutes of the new or novice traders. At the first stage it is important for you to get in the skin of the professional traders and understand their mind set or physcology or whatever you prefer to call. This book will keep you from making the mistakes most commonly made by novice traders (NO .. nothing to do with technical analysis.. but just plain old do-don't rules). Hard as it may seem BUT dont move to the next stage until and unless you completly understand the way a trader operates. Here is my list of books which will help you prepare for this:

1. How I made $2,000,000 In The Stock market - Darvas.
2. The Battle For Investment Survival - Loeb.
3. Reminiscences of A Stock Operator - Edwin Lefevre
4. Market Wizards - Schwager
5. Trading For A Living - Alexander Elder

Stage 2 - Trading Strategy : Having understood the mindset of a trader's its now time to also understand the strategy adopted by this traders. Yes .. another list of exhaustive books ... this books detail the various strategy used by this traders, many of which will overlap, but each is a gem of its own. Some of the books also are centered towards US stock markets. Some of this books recommend tools which will be ubavailable in INDIA and hence of not much use to you. None the less .. read this books simply to gain a insight in the different ways of trading.

1. How to Trade in Stocks - Jesse Livermore. Its a Classic.
2. Secrets for Profitting In Bull and Bear Markets - Stan Weinstein.(I recommend it heavily to my friends). It sounds costly but buy it and you wont regret.
3. The Successful Investor - William O Neil. (ONeil's books are heavily laced with advertisements for his financial news services but none the less he gives very level headed and simple advice which actually helps.
4. Come into my trading room - Elder. Its a Classic.
5. Trade your way to financial freedom - Van Tharp (Its worth only for the chapter on position sizing). I recommend it purely because position sizing though a important defence strategy used by professional traders is hardly ever used by amateur traders. Read this book and you will know why i recommended this book.

Stage 3 - Technical Analysis :
Many a books are available for TA. I kept this section for the last as i feel that buying one or two of this books can suffice.

1. Japanese Candlestick Charting - Second Edition - Steve Nission
2. The Visual Investor - Murphy
3. Trading Classic Chart Patterns - Thomas Bulkowski (its a hugh encyclopedia .. not worth buying if you belive in the KISS strategy.. read it for your exams)
4. Getting Started In Technical Analysis - Schwager
5. Technical Analysis of the Financial Markets - Murphy
OR
6. Edward and Maegie .... just pick up this classic book. period.

The above books are mentioned in random order. I hope this will help users in selecting books as per their understanding stage.

But for those new to TA or stock investing and not willing to invest in books, i suggest them to read through many fundamantal and technical tutorials available on many a site ... sharekhan.com had a vast array of tutorials ... also check out : http://www.investopedia.com . Check out the online tutorials and once you are comfortable, invest in the books.

Before i sign off .... Dont buy books simply because they were mentioned here. Check out how this books were revieweed by other users. Ask about this books on online communities like this.

Stumper.

thanks, great pathshown. step1, step2 ,step4... practice2yr
next read BILL WILLIAMS BOOK on chaos theory
oilman5

Hi Oilman5,

Thanks for your comment. I would disagree with reading chaos theory... ha ha ha .... traders are the one who benifit because of in-efficient market.

Stumper

Thank you very much Sir, for giving a good and timely guidance

Hi
Making money in trading is about trend following or scalping.
Please read covey's books and guppy's and turtles' experience.
I follow trends, there is one in all time frames.
good hunting

Mike

Read the Essentials of Forex by J. Martinez, It was my first book. It is a really easy to understand book that covers almost all topics. That book is a great starter book. Of course my favorite by surprise is Age of Turbulence by Alan Greenspan. I thought this book would be boring but it has open my eyes to how things are run at the fed and elsewhere, If you plan to trade ANY market this book is a must.

HI all !
I think same technical knowledge is sufficient to trade all markets. But I want to know how currency markets actually work, ie; how to gain knowledge of fundamentals of currency.

i like market wizards because you actually hear from succesful traders 20years ago that are still successful today......paul tudor jones