The following titles represent, in my view, the books every novice and experienced stock market investor or trader should own. I have limited the list to five titles for expediency. The remainder of the titles I believe to be of excellent value to a new investors’ stock market education are listed elsewhere on the blog as I make reference to them. Please note that learning how to trade stock markets is a continuous process and I encourage all new traders to read as much as possible about the stock markets.
The New Market Wizards: Conversations with America’s Top Traders
Jack Schwager interviews some of the worlds’ most successful stock market traders. For new traders, it offers the opportunity to learn the traits a successful trader needs to develop straight from the horses mouth. Indeed the author himself, as a result of his interviews, lists these traits or ‘observations’ towards the end of the book, an excellent piece of work.
Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders
This is a cracking read and is based on the true story of an experiment between two well known and very successful traders to teach 25 people from all walks of life to trade. This book is written by arguably the most successful trader, Curtis Faith, who reportedly made $31.5 million in profits from the age of 19. It sets a good example of how new traders should stick to the rules of their own trading plan mercilessly.
Rich Dad, Poor Dad
The only book I recommend that is not focused on stock market trading. It is a brilliant introduction to entrepreneurialism and must read for anyone who wants to break free from the ‘rat race’ but does not know how. It is packed full of examples and has become the number one personal finance book.
Trade Your Way to Financial Freedom
In terms of the practical aspects of trading, this book is a must read for every trader of financial markets. Van Tharp’s ideas about risk and risk management can make the difference between a losing trader and a profitable one. When so many concentrate on set ups and how much they can make, Tharp preaches a philosophy of minimising how much you can lose in order to become a winning trader. If the idea of managing losing trades sounds strange, you really need to read this book.
How I Made $2,000,000 in the Stock Market
An interesting story that tells of how someone with a full time job with no prior experience of the stock market became a legendary trader. Although this book contains a ‘system’, I regard this book as more of a motivational text and an example of the commitment required for successful investing.