April 18th 2019 Interviews

The 6 Best Books To Read For Traders

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If you ever walk into a bookstore, chance are you’ll pass by the Finance section only to see shelves upon shelves filled with books featuring the charismatic faces of dozens of men in sharp business suits next to a tagline claiming to be able to make you rich within the short few hours it’ll take to read the book. If that sounds too good to be true, that’s because it probably is - however, there are some gems among those that can impart you with some real valuable knowledge to give you some real finance know-how and teach you the real trading 101.

The Intelligent Investor by Benjamin Graham

This book is old. With the first edition having been published in 1949, this book has truly stood the test of time unlike many other. Benjamin Graham passed away in 1976, however his work still succeed him post-mortem, having been updated several times since then by equally successful finance authors. It’s one of the bibles for long-term investing and comes recommended by Warren Buffet himself.

Freakonomics by Steven Levitt & Stephen Dubner

Hailed as one of the best books of our generation, Freakonomics takes complex financial and economic concepts and makes them relatable and interesting, all while maintaining a unique sense of humor to keep it fresh. This is a book that should definitely be apart of everyone’s personal trading 101 course.

Security Analysis by Benjamin Graham & David Dodd

Graham is the only name you’ll see on this list twice, and for a good reason too. In this book, Graham and Dodd explore the concept of value investing. Value investing is the principle of “spotting a good deal” - it teaches how to find undervalued stocks, buying them while they’re cheap and waiting for them to reach their actual worth, leading to significant profits.

Liar’s Poker by Michael Lewis

History repeats itself, that much is true. What many don’t know is that this principle also applies to the financial markets. Lewis looks at Wall Street from a big picture perspective and explains just what went down in the 2000s when the housing market crash happened, sending the global economy into recession. An assumption here can be made that something similar is going to happen again within the next decade or so, making this book worth a read.

Manias, Panics and Crashes: A History of Financial Crises by Charles Kindleberger

In line with the previous entry, this book explores history and the trends that are observable in the time leading up to massive financial crises hitting the world. Kindleberger is a specialist in economics, teaching at MIT prior to his passing in 2003. The first edition was released in 1978, but has been revised several times since then as different crises had occured in the last 15 years. The latest edition covers the 2007 and 2008 financial meltdown and its causes.

Mastering Market Timing by Richard Dickson & Tracy Knudsen

Supply and demand are some of the most fundamental concepts in business, economics, and of course, finance. In this book, the authors discuss two important economic and financial principles, especially the Lowry analysis and Wyckoff method, which have a direct relation to supply and demand. Said two methods can be combined to understand price to volume analysis, which are key in understanding market trends affected by supply and demand.

These books together should be able to give anyone a solid understanding of finance, its markets, the economy and investing as a whole. These 7 books are far more valuable than most of what you’ll find in the bookstore’s financial section and can teach you some real and proven ways to make money by trading.