Stock trading has become hugely popular in the United States. This is down to the potential of winning huge returns if you put the time and effort into it.
To become a stock market trader, you’ll need to educate yourself on the matter. More so, you’ll need to learn how to create a strategy and stick with it even when things aren’t going great.
But yet another factor that hugely impacts a traders’ success is psychology. If you don’t develop strong psychological traits and cultivate them, you will never succeed in this industry.
Luckily for you, there are dozens of books that teach you how to do that. So with all that said, here are the 6 books every stock trader needs to learn.
1. Trading in the Zone
Become a successful stock market trader means being consistent. Volatile trading is something that every expert advised against. And this book teaches you how to avoid such markets and instead of focus on finding consistent ones.
The author of Trading in the Zone, Mark Douglass, teaches the reader how to detach themselves from greed and risk. These are some of the biggest issues that plague the industry, and especially rookie traders.
The book also says that greed and risk can easily develop into character traits, traits that every trader has to avoid. As you can see, the book heavily dives into the psychology of stock market trading. So if you want to learn more about the many practices, techniques, and how to understand them, this is the book for you.
2. Common Stocks and Uncommon Profits
More than one versions of this book exist. The first book written by Philip A. Fisher got an updated version that dives deeper into the many investment philosophies that rookie traders can use to seek out growth companies. Although the book focuses on many other aspects of trading, it primarily teaches you how to analyze a company and process the information to use it as an investment strategy.
Even the great Warren Buffett recommends this book and has personally endorsed it.
3. The Art of Thinking Clearly
The great thing about this book is that it is very easy to read. This is mainly due to the structure. Namely, The Art of Thinking Clearly has 99 chapters to dive into. This might sound a lot but wait until you hear that each chapter is only two to three pages long.
This gives the reader plenty of options to focus on a particular chapter instead of reading the book in its entirety. Although we heavily advise against doing that, the option is still there.
This book lays out examples of psychological pitfalls that everyone can fall into. It is not only rookie investors that make these mistakes; even seasoned veterans can oftentimes be swayed by numbers.
The Art of Thinking Clearly is an excellent read for both rookies and pros.
In addition to books, bestsellers, and classics, beginner investors can learn more about the stock market by simply following it. To do this, you will need to find a reliable website, journal, and perhaps even a blog that specifically writes about the stock market. And just as it so happens, we have one for you. If you’re looking to stay up to date with the stock market, then make sure to visit beststocks.com.
4. Beating the Street
It’s safe to say that multiple types of traders exist. You have those that invest and wait, and those that invest on a daily basis. The latter is more complicated as it does require plenty of time and knowledge on how to become a successful day trader.
Luckily for you, there are plenty of books out there on how to achieve that. Beating the Street is one of the best books for day traders. But what this best seller also teaches you is that not everyone will find success in the stock market.
Beating the Street is all about going through past mistakes in a bid to try and learn a valuable lesson. If you don’t mind spoilers, the lesson here is that due diligence always gives you a better chance of a positive return than listening for outside advice.
Since Wall Street gives plenty of advice to rookie traders, the book teaches you how to find good investments by analyzing companies.
5. The Investor’s Quotient
Yet another book that focuses on the psychological aspect of stock market trading, Jake Bernstein’s The Investor’s Quotient is a must-read for everyone that looks to overcome the fear of trading.
You might’ve heard that trading is this amazing way to make lots of money. If so, then do you go all in or patiently bide your time for a clever opportunity?
Regardless of what you do, it’s important that you familiarize yourself with the most common psychological problems traders encounter on a daily basis. Not only that, but The Investor’s Quotient also teaches you how to find solid tactics and strategies to overcome the many issues.
6. Bad Blood
It’s safe to say that plenty of these books are quite old compared to the market. But that doesn’t take away their relevancy. However, younger readers might find it difficult to comprehend the many points these books make.
If you’re having difficulty reading some of the before-mentioned titles, then a great option is Bad Blood by John Carreyrou. This book is based on real events that happened in 2018.
Namely, the book focuses on a private company called Theranos and their “remarkable” discovery of making blood testing much faster and easier. These claims promised to revolutionize the medical industry, but there was one glaring problem; the method that Theranos promised didn’t work. That didn’t stop the startup from reaching unimaginable heights on the stock market.
The point of this book is that no matter how promising the solution seems, you have to do your research. Since many traders didn’t do that and simply rode the hype train, they ultimately ended up losing their money; well, at least those that didn’t jump ship.