All that mankind has done, thought, gained or been: it is lying in matchless preservation in the pages of books. They are the chosen possession of men. - Thomas Carlyle
There is a vast wealth of wisdom and information to be found in the pages of books. One only needs to pick a book aligned to the topic of choosing and read it! The more you read, the more you learn. The more you learn, the more you will understand. And it is in this constant process of learning and practice that one achieves explosive progress over a short period of time.
Learn before you Earn
When it comes to active stock trading, there are NO SHORTCUTS. Like any other skill, you have to put in the work on a consistent basis while adhering to a strict conduct of patience and discipline. One of the tools that will dramatically increase your odds of profitability is learning through reading books. In this context, stock trading and investment books.
There are many books out there that have condensed the life long experiences of master traders and investors. Through extensive reading, you will learn from the likes of Waren Buffet, Jesse Livermore, Mark Minervini, Paul Tudor Jones, George Soros and many more. Imagine having the greatest of the greats as your mentors!
Having read a huge array of trade and investment books, we have listed some notable ones that are very relevant to the fast paced condition of the market now. Consider reading the listed titles below as they have been a huge factor to our success in stock trading. We hope that you benefit from these books as well.
Trade Like a Stock Market Wizard by Mark Minervini
Mark Minervini is a world renowned stock trader who has achieved triple-digit returns for five consecutive years, averaging 220% per year for a 33,500% compounded total return.
In this book, Minervini highlighted the thought process and strategy that went behind the formulation of his Specific Entry Point Analysis® – SEPA methodology.
This book contains a wealth of information about the specific metrics a trader has to adhere to in order to produce sustainable profitability in stock trading.
Think and Trade Like a Champion by Mark Minervini
Think and Trade Like a Champion is another highly recommended book from Mark Minervini. This books guides you on a step-by-step process on how to use his time-tested principles. A wealth of tips and strategies are scattered throughout this masterpiece that aims to dramatically improve your performance and develop the confidence needed to achieve Superperformance.
Minervini reveals his personal trading rules and the road tested techniques that are very relevant and applicable across different market contexts.
Momentum Masters: A Roundtable Interview with Super Traders by Mark Minervini, Bob Weissman (Editor)
Momentum Masters is a book written in a round table format containing over 130 real questions from real traders answered by Mark Minervini, David Ryan, Dan Zanger & Mark Ritchie II - four of America's top momentum investors.
The questions in the interview cover a wide range of areas in trading including:
Stock Selection
Position Sizing
Technical Analysis
Fundamentals
General Market
Entry Criteria
Risk Management
Trade Management
Psychology
Unholy Grails by Nick Radge
Unholy Grails discusses the finer points of systematic stock trading. It is heavily leaned towards momentum trading with key emphasis on stock qualification and technical entries and exits.
Radge explains the ins and the outs, with practical insights and common sense comments and observations. He also covers 7 varying ways to execute momentum trades.
This book details a road less traveled; a compilation of practical strategies for the active investor who is looking for long term gains with minimum daily effort.
Learn to Earn by Peter Lynch and John Rothchild
Peter Lynch came to prominence in the 1980s as the manager of the spectacularly-performing Fidelity Magellan Fund, and he has since authored a trio of well-received books. Geared towards a younger audience, Learn to Earn explains many business basics, while One Up on Wall Street makes the case for the benefits of self-directed investing.
This book also shows the importance of saving and investing on a personal scale, and how much it can enhance your wealth if you do it right. It touches the concept of proper cash flow so that you can better sustain your investments for the long haul.
Note that some parts of the book are already outdated in the context of today's market.
How to Make Money in Stocks by William J. O'Neil
O'Neil formulated the CAN SLIM system of qualifying stocks, where each letter in the acronym stands for a key factor to look for when purchasing shares in a company.
C = Current Quarterly Earnings Per Share
A = Annual Earnings Increases
N = New Product, Enterprise or Service
S = Supply and Demand
L = Leader or Laggard
I = Institutional Sponsorship
M = Market Direction
O'Neil's, method relies upon analyzing the quarterly and annual earnings of a company over the last few years for those select few with accelerating gains.
Stocks for the Long Run by Jeremy Siegel
Stocks for the Long Run explains in detail the concept of investing in stocks for the long haul. It extensively draws on more than two centuries of research and illustrates the beauty and strategy of long term investing.
Through backtracking exhaustive historical data, Siegel illustrates the powerful wealth building potential of equities when positioned in a long term basis. He claims that equities will not only surpass all other financial assets when it comes to performance, but he argues that stock returns are safer and more predictable during inflationary climates.
Hit and Run Trading: The Short-Term Stock Traders' Bible by Jeff Cooper
Hit and Run Trading reveals Cooper's winning methods for day trading and short trading the market. He outlines a guide on how to trade the best moving stocks based on price action and technical analysis based methods.
It also covers which stocks to focus on each day, where to place your buy stops and sell short stops and the precise amount of risk you should take.
This book is geared more for intra-day traders who are accustomed to managing volatile plays. This is a complementary guide for traders keen on monitoring daily market volatility.
Trading in the ZONE by Mark Douglas
Trading in the Zone delves into the complexities of trade psychology and seeks to establish a solid foundation that every trader must adhere to in order to respond to both wins and losses.
This book has no specific fundamental or technical strategy. It rather aims to focus on the winning mindset of successful traders. It is a dissection of the common denominators among consistent winners that may not be clearly noticeable to many.
One notable highlight of this book is the five “fundamental truths” about the market which when firmly understood, will translate to a more resilient approach to stock trading.
Principles by Ray Dalio
Principles is the wild card among the books in this list. It is not so much a book about trading, but rather a template of principles that you can emulate in order to achieve success in any endeavor you do.
Ray Dalio, one of the world’s most successful investors and entrepreneurs, shares the unconventional principles that he’s developed, refined, and used over the past forty years to create unique results in both life and business—and which any person or organization can adopt to help achieve their goals.
Whether you are into trading or not, this book is a must read.
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