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Stock Market Trading For Beginners - Best Trading Books - Duration: 16:46.- [Instructor] In this particular video I'll
be answering three most common questions asked
by beginners in stock markets.
So these questions are number one,
how to become a successful trader in stock market.
Number two, how to get started in stock market trading.
And number three, how to become a full time trader.
So I've given a compilation of 10 books
that you need to read just to get started
and I've explained the importance of each book in the video.
So let's get started.
( music)
- [Announcer] In this channel we talk about trading,
investing and market analysis.
To help you become a better investor and trader.
So if you're new here consider subscribing.
- [Instructor] So in this particular video
what I have done is, I have focused on three main components
that are required to become successful trader
in stock markets.
Number one is technical knowledge, that is technique.
Number two is money management,
and number three is learning trading psychology.
So I have divided this entire video into three segments,
there are some books which will focus just on technique,
there'll be some books that are focusing just
on money management and I have books
that will focus on psychology.
So in case you're a new trader in the market
or let's say you still haven't made it to the highest level,
this is actually a good place to begin with.
I will divide this video into many parts
because there are much advanced books as well
and I'll cover those books in separate video.
So the kind of books that I've selected,
there are very easy to read
and whatever technique you learn is very easy to implement.
And this is precisely going to add tremendous value
to your learning curve.
So the first book that I have short listed is,
Technical Analysis of Financial Markets by John Murphy.
Now, in my opinion this is bible of technical analysis,
you should definitely be reading book because
this book alone will increase you knowledge leaps and bound.
And the best part about this book is that
it starts with basic introduction of technical analysis
and then moves towards various form of charts.
Then it mentions about trend, that is trend trading
and various patterns in the market.
It also covers topics such as candlesticks,
point and figure, Elliott waves.
There's also a section on market profile
and then it moves to covering various indicators
and even market breadth chart in detail.
Now, breadth chart is something that I share
on a regular basis, so you will kind of relate where
the concept of breath chart, I have picked up from,
when you start reading this book.
There is also a special section dedicated
to intermarket analysis and relative strength.
Again, I've done a complete series
on relative strength.
It's must watch a video because relative strength
is one topic which is not covered widely as such.
And intermarket analysis again,
is a wonderful topic because it shows you the linkage
between equities, bonds, currencies,
and other asset classes.
And by the time you will come to the end of this book,
this book will also cover money management and risk
in detail and do a read the chapters on moving averages,
trendlines and time cycles.
So the next book that I've selected is,
How To Trade In Stocks by Jesse Livermore.
So the commentary in this book is given by Richard Smitten.
Now this is a wonderful book about the life
of Jesse Livermore and his stock market trading career.
This book basically teaches you his thought process,
the mistakes that he has committed
and how you should avoid those.
It's actually a blend of technical knowledge,
money management, and trading psychology.
You cannot categorize this book as purely technical book,
but it introduces you to some wonderful
concepts of following leaders, that is momentum.
The concept of sister stocks,
which I have discussed many times.
Again, I've picked up this concept from this very book
and it teaches you a lot of things about money management,
being humble in market,
about importance of listening to the market
and not forcing your will on it.
And it also emphasizes a very important point
that markets have not changed that much,
let's say from 1940s or '60s or '80s or '90s.
The kind of market that we're living into right now,
yes, news is discounted pretty fast, but other than that,
human psychology remains the same.
This is something you will realize when you read this book
because a lot of the events that have been discussed
in this book happen even in this era.
So again, it's a wonderful book,
one of my all time favorite books
and I've read it many times, so do give it a read.
The next book is again by John Murphy.
Now this book is called The Visual Investor
that is How To Spot Market Trends.
Now this is more or less a investments sort of book,
but all the principles that are discussed
here apply to trading as well.
The beginning of this book is really nice
because it focuses more on technical analysis
in current times, that is,
some sort of changes have happened in the market.
This book covers most of the aspects.
There is also a wonderful chapter on moving averages
and MACD indicator, do read this.
This book also discusses a lot about relative strength
and sector rotation.
This was actually not covered in great detail
in John Murphy's first book that we covered,
but in this particular book he has covered this
along with a section on mutual funds and ETF's.
One more thing that I really liked in this book was,
of asset allocation.
This topic is also covered in great detail
and examples are given out of 2002 and 2007 periods.
So overall, this is again a very good book
and it gets you to think about longterm
and the importance of trading in the direction of trend
and how you can profit from the same.
So the next book that I've shortlisted
is Encyclopedia of Chart Patterns.
Now this book basically covers all the patterns
that you can find.
It's purely for those traders
who like to trade only with price.
The good thing that I like about this particular book
is that, Thomas Bulkowski has explained most of
the psychology behind the setups that he has explained.
This is a huge bonus along with the fact that
he has back tested and shared the statistics
of all the patterns that he has discussed.
Now why this becomes a huge bonus for you
is because you can directly come to know which patterns
are actually high probability patterns,
which patterns are the ones which fail the most.
Therefore once you see,
in real time a high probability pattern playing out,
you can pay more attention to that
instead of a pattern which has more failure rate.
So again, this is a really nice book for those
who purely want to trade on price and this may not
be categorized as a traditional technical analysis book,
but it does a wonderful job in explaining you
all the trading patterns and the psychology behind it.
So do give this book a read,
again, it's a very, very good book.
So the next book that I've chosen is,
Japanese Candlestick Charting.
Now this is a brilliant book on candlestick trading.
Do read this book because it directly takes you
to the psychology part of the chart.
This is a point that I've emphasized many times that
instead of focusing on candlestick chart or bar chart
or a line chart, see what is happening on the chart
in terms of psychology.
So this particular book will get you thinking
in this particular direction.
This book's pace is actually really easy to read.
It starts with the history of this technique
and quickly moves into identifying various reversal
and continuation patterns
and how this overall candlestick charting gels
with other fields of technical analysis,
like moving averages, trend lines, and so on and so forth.
So do read this book, again, a brilliant book.
The subsequent two books that have been written
by Steven Nison, on the same subject,
you can refer to those as well,
but this remains my favorite book on this subject.
The next book that I've shortlisted
covers the subject of relative strength in detail.
Now there are a lot of softwares out there
which give you stocks that are out performers
or under performers in terms of relative strength,
but let me tell you one thing,
I'm not against any software,
but there is no software or automation that can replace
human skill, which is why, again,
go back and refer to this book.
I've read this book so many times
that I can't even remember.
It remains my all time favorite book,
the name of the book is
Secret For profiting In Bull and Bear Market.
It's a 30 year old book, but you'll be surprised
to see the concepts discussed in this book
still hold true in this era.
So do read this book.
This book entirely focuses
on identifying outperforming stocks
and underperforming stocks and how to benefit from the same.
Next book in line is Complete Turtle Trader.
Now turtle trading system was one of the
most famous trading systems.
You might have heard lot of stories about this.
It's a wonderful book that gives you an account
of what happened back then,
where a group of traders was selected
or rather individuals were selected
and they were made into full time traders.
So this book focuses more on psychological aspects
of trading, do take notes of this because you'll learn
so many things from this book, a journey of a trader,
what mistakes they make, I mean, it's a beautiful book,
do give it a read.
There's also another book by Michael Covel on trend trading.
Once you finish with this, you can start that as well,
but it remains optional.
Next book that I select is,
Trade Your Way To Financial Freedom, this is by Van Tharp.
Now this is all about money management
and this book will actually teach you
how not to go bankrupt.
Again, it teaches you how to position size,
how to define your risk, how to assess your system,
in case you're a systems trader,
this book is the book for you in terms of risk management.
Even if you're not a systems trader,
you're going to learn so much about risk management
that in the end your whole approach towards trading
and risk analysis would change forever.
So do give this book a read as well.
It's a wonderful book and a must read book for traders
who are looking to manage their money well.
The next book in line is,
Trading In The Zone by Michael Douglas.
Now, if John Murphy's book was the bible of stock market,
technical analysis, this book is the bible
of stock market psychology.
It's one of the most comprehensive books that is written
on the subject and you'll be amazed to read this book
because it explains the human mind.
It explains how you should be disciplined
and why you should be disciplined.
It also explains the importance of trading your own belief,
your own set of rules, how you need to focus
and being in the now and not overthink about anything else.
The overall focus of this book is to help you think like
a professional trader,
how to ignore things that don't matter
and it shares the state of mind that you need to get into
in terms to become a really successful trader.
It really focuses on the right mindset and attitude
of successful traders and how you can attain the same.
So this again remains a very, very, very good book,
rather the best book on this subject.
It is the bible of stock market psychology,
so do not forget to read this.
Take a lot of notes because as and when you start developing
or honing your skills further,
this book would have played a huge role in terms of
how you think about yourself and how you think about
your relationship with market.
The last book that I recommended is
Market Wizards by Jack Schwager.
Now this book is the compilation of interview
of legendary traders in stock market.
It's a beautiful book.
The reason I say so is because you get all those insights
from these great minds who have succeeded
in stock Market trading for decades.
This book actually interviews a host of traders,
some are futures traders, some are just stock traders,
some intraday traders,
some are a mix of derivative and stock traders.
So again, it's a beautiful book.
I have mentioned six or five interviews that you must read.
One is by Ed Seykota, Paul Tudor Jones, Richard Dennis,
Marty Schwartz, and William O'neil.
Do not miss these five interviews
that have been compiled in this book.
It is one of the finest books that has been written
in this particular field, and again,
you'll be amazed to see how these are traders think
and how you need to replicate their sort of thinking
to attain similar success.
So now I'll just take a minute or two to tell you
how to proceed from here, if possible,
please read the books in the order I have suggested
because I've carefully decided the order
in terms of ease of readability and application.
The one thing that I always emphasize upon is,
do take lots of notes because these notes will form
the building blocks for your trading career
as you move forward.
Take your time in reading these books, please don't rush.
Usually we have a tendency to finish a book in a day or two,
or let's say you want to move to another book
and we simply want to read this book really fast.
Don't do that.
I think the real benefit from this trading list of booklets
that I've compiled is if you go really slowly and absorb all
the concepts really well and take notes of it.
So by the time you've finished these books,
you will get a idea of technical knowledge that is,
you will get to know what sort of knowledge
you require moving ahead.
You'll also get to know the main factors
that actually influence success in a stock market trading.
You'll learn a lot about how to assess risk
and how to manage your own money.
That is within the risk parameters that you set
and most importantly, you would have learned
how to have a winner's mindset and how to proceed from here
in order to get that particular mindset.
One request that I'll make is that don't look
for trading techniques or systems in all these books.
Instead, again, focus on all the psychological learnings
that you can get from these books.
Take notes and keep revisiting those notes again and again.
So that's all for this particular part.
I'll be coming up the other part pretty soon,
which we'll discuss more about some advanced books,
advanced techniques,
even I'll get into some software, selection of brokers,
those kinds of things, so in case you have any doubt,
just leave a comment below
and I'll get back to you as soon as possible.
So thanks a lot for watching this video guys.
Be Safe.
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