Trading in stocks as a complete novice can seem like an intimidating undertaking, to say the least, or flat-out dangerous if you don’t adhere to well-thought-out strategies and techniques. That’s why we have put together this guide with the 10 most acclaimed, best-selling, and beginner-friendly books to help you start making savvy trading decisions on the stock market today.
- What is Investing? Putting Money to Work
- 17 Common Investing Mistakes to Avoid
- 15 Top-Rated Investment Books of All Time
- How to Buy Stocks? Complete Beginner’s Guide
- 10 Best Stock Trading Books for Beginners
- 6 Basic Rules of Investing
- Dividend Investing for Beginners
- 5 Passive Income Investment Ideas
#1 Matthew R. Kratter “A Beginner’s Guide to the Stock Market”
How to make money on the stock market, if you have never traded before? Well, why not start from Kratter’s “A Beginners Guide to the Stock Market” which will give you a basic rundown on everything you need to know when you first start trading on the stock market. Learn how to avoid gambling away your hard-earned cash or making costly beginner mistakes and start making money on the stock market today. Among its many lessons, this book will teach you:
- Where to open up a brokerage account;
- How to buy your first stock;
- How to create passive income;
- What to consider when picking stocks;
- How to spot a stock that is about to blow up;
- How to trade momentum stocks;
- Insider tricks used by professional traders;
- What to never do when buying value stocks.
#2 Martin Schwartz, Dave Morine, Paul Flint “Pit Bull: Lessons from Wall Street’s Champion Day Trader”
“Pit Bull: Lessons from Wall Street’s Champion Day Trader” takes the reader on the journey of Martin ‘Buzzy’ Schwartz whose career as a trader on Wall Street rightfully earned him the nickname ‘Pit Bull’. The book is an exhaustive true story of how Schwartz made his millions, the mistakes and triumphs along the way and the lessons learnt throughout.
A riveting insider’s account for beginners and experts alike on the tricks, strategies and attitudes required to become a winner.
#3 Edwing Lefèvre “Reminiscences of a Stock Operator”
Another book based on true events, recounts the life of Jesse Livermore, his dizzying ride through trading in small bucket shops to making and losing millions on Wall Street and what failure taught him along the way.
While published almost 100 years ago, its vivid and engrossing portrayal of success and failure has lessons that remain relevant to the present day. A truly timeless tale, “Reminiscences of a Stock Operator” has remained the most recommended and read investment trading book ever.
As told by the man himself, “There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!”
#4 John J. Murphy “Technical Analysis of the Financial Markets”
John J. Murphy’s “Technical Analysis of the Financial Markets” is considered by many as the ultimate handbook for technical analysis, providing everything you need to know about trading using technical analysis. It gives a comprehensive overview of:
- Reading charts;
- Understanding indicators;
- How to track and analyse market behaviour.
This book is a revised version of Murphy’s earlier release “Technical Analysis of Futures Markets”, which includes new material on candlestick charting, Intermarket relationships, stocks and stock rotation, with examples and over 400 charts to help apply theory to practice.
#5 Stan Weinstein “Secrets for Profiting in Bull and Bear Markets”
Another go-to for the fundamentals of technical analysis in trading is “Secrets for Profiting in Bull and Bear Markets”. Weinstein outlines various strategies to profit in both bull and bear markets, employing both fear and greed to become a better trader. With case examples and sample questions after every chapter, the reader will be thoroughly prepared to take on the stock market! What’s more, Weinstein will lay out:
- His personal philosophy on investing;
- The best time to buy;
- Knowing when to sell;
- The rules of short selling
#6 Michael Lewis “The Big Short: Inside the Doomsday Machine”
Having spent 28 weeks on The New York Times best-sellers list, the most well-known book on this guide has to be Michael Lewis’s “The Big Short: Inside the Doomsday Machine”, compellingly sensationalised by the critically acclaimed 2015 film of the same name.
The book offers a highly engaging look into the years preceding the eventual collapse of the United States housing bubble in 2007 and 2008. Though the story is full of mindbending and ridiculous financial schemes, the author has opted for a personality-driven narrative which makes the book more accessible and fun to absorb.
Though an entertaining story, at its core the book is an exploration of what makes a successful trader. It delves into the psyche of short-sellers and how they used their strategy to exploit the weaknesses of the market.
#7 William O’Neil “How to Make Money in Stocks: A Winning System in Good Times and Bad”
Even though “How to Make Money in Stocks: A Winning System in Good Times and Bad” was first published in 2009, a year after the market meltdown, it still managed to sell a whopping two million copies. Here William O’Neill presents his CANSLIM Investing System – a seven-step guide to maximizing gains and minimizing risks, supported by 125 years of research on the best-performing stocks.
He believes that market timing, trading and interpretation of stock charts can help significantly in your investing. You’ll be sure to find proven tricks:
- For recognizing winning stocks;
- Tips for spotting the best stocks, mutual funds and ETFs.
All in all, this book provides great strategies for investing in stocks, as well as a list of common investor mistakes to avoid making along the way.
#8 Mark Douglas “Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude”
Rather than presenting the reader with numbers and charts, this book is all about the psychological aspect of trading, about how to overcome your flaws to become a more objective trader.
Douglas suggests that most of the mistakes that a trader might make “will stem from attitudes about being wrong, losing money, missing out, and leaving money on the table. … the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.”
“Trading in the Zone” equips the reader with various tools to control their ingrained mental habits and emotions and instead look at a particular trade from a purely risk and reward point of view. To accept the risk by accepting “the consequences of one’s trades without emotional discomfort or fear.”
#9 Jack D. Schwager “Market Wizards”
Certainly a must-read for any aspiring trader, “Market Wizards” offers insights into the minds of the most successful traders the world has seen. You’ll hear straight from the experts from this interview-style book, featuring investing superstars including Bruce Kovner, Paul Tudor Jones and Jim Rogers. To make it all the more appealing, the author has condensed their responses to a set of principles you can apply to your personal trading career.
Though it makes for a captivating read, the real value of the book lies in the commonalities as well as the differentiators it uncovers between the interviewees. Revealing once more that success on the market is determined by a sound methodology and mental state, rather than luck or extreme wits.
#10 Joel Greenblatt “The Little Book that Beats the Market”
In another New York Times bestseller, “The Little Book that Beats the Market”, Joel Greenblatt does more than just set out the basic principles of stock market investing. Rather, the reader is presented with a reasonably straightforward investing strategy called the ‘magic formula’. In fact, you can test out the formula online here.
Greenblatt’s use of simple language and humor are guaranteed to make the reading experience enjoyable and accessible. You’ll learn:
- How to use this low-risk tool and beat the market at a wide margin;
- How to view the stock market;
- How to start looking at the earning yield rather than the dividend yield when making investments;
- Why this too will keep working even after everyone knows about it.
FAQs on Stock Trading Books
Why should I buy a book on stock trading?
Trading in stocks is all about method, research and a sound mental state. Tricks to gain the right insights and techniques are best found in quality trading books. Don’t gamble your hard-earned money away and learn from experts and investing success stories to make educated decisions on how to triumph on the stock market.
How do I choose the right book for me?
It is important to set your goals and determine your level of knowledge in the field. What do you want to learn more about? Is it market trends, the right stocks to invest your money in or best tricks to outsmart the market? Would you rather start from textbook style basics or an autobiographical success story?
Are vintage books on trading still worth a read?
Though the market has changed quite a bit, the principles of smart trading have stayed the same. In fact, many of today’s prominent investors have been influenced to think in line with the theories found in these books, thereby affecting the market with their purchases. Old books on trading will help you see the fundamentals – the big picture, to help you contextualise the technical information you might find on the internet and in more current books.
Which books on stock trading should you avoid?
Avoid any books that boast a get-rich-quick scheme, while appealing, most include dangerous investment strategies and scams a beginner might not be able to suss out. It’s also smart to be wary of authors without an impressive resume on the subject.
What price range should I expect from quality books on trading?
The price of a book always depends on which retailer you opt for, the cheapest of which is often Amazon. The price for trading books ranges anywhere from $7 to $45, with the majority being under $15. Usually, the best bargain for a new book will be the bestselling one, as older books can be a rare and expensive find online. In addition, it’s always smart to keep an eye out for vintage steals you can find both online and in second-hand bookshops.
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