As much as I’d like to argue that my writing is all you need to be a great trader…
I know it’s not enough. You have to do some real work to overcome so many challenges from this hobby/profession. If you’re new to trading or have been working to refine your skills, I want to introduce you to five books that will be valuable guides to your success.
No. 1: “A Random Walk Down Wall Street,” by Burton G. Malkiel
“A Random Walk Down Wall Street” is one of the most iconic books about the financial markets. Inside, you’ll learn about several strategies and the importance of technical analysis to fundamental analysis.
Malkiel doesn’t believe in the concept of market timing — something that I firmly believe — but he argues instead for investors to take a much longer approach due to the randomness of finance. Yes, you can buy the dip, and the markets have an upward bias in the long term. This chart shows the upward bias and all of the challenges the market has faced in the last 35 years. |
Pick up this book if you want to understand market trends, risk management and smart diversification. It’s a must-read for anyone looking to tackle the financial markets.
No. 2: “Market Wizards,” by Jack D. Schwager
We know who the best investors are of all time. Warren Buffett, Carl Icahn, Ben Graham and more. You know their names. But do you know some of the most successful traders of the 20th century? Schwaget takes us into a deep dive that there is no one-size-fits-all strategy to tackling the markets. But you do need extreme discipline and a deep understanding of market dynamics. Schwager shows you how.
No. 3: “Flash Boys,” by Michael Lewis
Michael Lewis is one of the most incredible financial writers of our time. And while “The Big Short” is a great account of the 2008 Financial Crisis, “Flash Boys” takes us into our competition in the financial markets: algorithms and high-frequency trading. This book takes you into the world of how technology shaped the financial markets and removed the need for physical trading pits. “Flash Boys” is why we know that there isn’t a trend in this market, as Stanley Druckenmiller has explained. It’s a fantastic book.
No. 4: “Thinking, Fast and Slow,” by Daniel Kahneman
This isn’t really a “trading book” so much as it is a behavioral psychology book. You must understand cognitive biases and how to make great decisions as a “trader.” You learn how your brain works, and how to avoid common mistakes that all traders make. The point is to recognize those errors and never make them again. This is how you’ll learn a rational approach to trading and other elements of life..
No. 5: “Reminiscences of a Stock Operator,” by Edwin Lefèvre
If you don’t know the name Jesse Livermore, get ready. He was one of the most famous traders of the early 20th century, and he talks about his experiences — both failures and big wins. This is a book that will take you on the real emotional journey of being a trader. You’ll tackle risk management, how to adapt in any market condition, and how to triumph alongside one of the greatest names in the history of finance.
Bonus
My favorite financial book of all time is “Manias, Panics, and Crashes” by Charles P. Kindleberger.
This book tells the tale of recurring patterns of economic crises. The author digs into the psychological and behavioral factors that drive speculative bubbles, market manias and eventual crashes, drawing parallels across centuries. We as human beings just can’t help ourselves.
Kindleberger tackles the South Sea Bubble to the Great Depression and more, and reminds you the next crisis is just around the corner.
Conclusion
It’s critical that you take the time to read the greatest books in finance. Yes, sometimes they get a little dry, but I assure you that you’ll find yourself captivated by the history of finance and trading like I am. If you’re ever looking for a few more recommendations, just ask. My library is huge.
Chat soon,
Garrett Baldwin
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
P.S. Very Few Traders Use This Buy Signal
Whether you’re a day or a swing trader, or a long-term investor…
There’s one stock market pattern that needs to be on your radar as we close out 2023…
It’s the No. 1 pattern traded by a former Wall Street Vice President…
And I found it to be incredibly useful in times of uncertainty…
It’s the same pattern that tipped him off to the dotcom crash and the Great Financial Crisis…Set featured image
Now, I’m not saying a major market crash is coming…
But what I am saying is…
This pattern can be used to help keep you out of trouble if markets remain rocky…
But not just that…
It can be used to identify the market’s strongest moving stocks both to the upside and the downside.
