Trading Books – Introduction
To be a successful trader or investor, reading is one of the most important things you should do. I have not seen one successful trader who abhors the need to read. This involves reading financial books, magazines, commentaries, and financial news. For full-time traders, this is easy because they have lots of time to multi-task between trading and reading. By reading, you will gain understanding of various ways through which other traders trade. You will also learn from the mistakes of other traders. Also, you will learn new strategies that you can use to boost your trading skills. Other books will give you a good indication of how the economy work and the process which policymakers follow to make policy decisions. This article presents a number of books that have had an important role in my trading career. The books are listed with no particular order.
Trading Books – Stress Test
This book has nothing to do with trading. It was written by Timothy Geithner who served in Obama’s administration as the minister for treasury. The book is a reflection of the financial crisis that happened in 2008. This was a period when most traders lost billions of dollars as a result of the global financial crisis that was caused by the fall of housing prices. During that period, many traders who had placed their bet against the market made sweet returns on their investment while longs suffered a major beating. The reason I would recommend this book is that it highlights the things that usually happen behind closed doors. As such, by reading the book, you will be at a good position to understand and anticipate the key economic decisions.
Trading Books – Octopus
Octopus is an interesting book. It is based on the true story of Sam Israel who is now locked up in jail. Israel started his career as a trader at a relatively young age working for two guys who traded using insider information. Years later, he started his hedge fund and started making losses from day one. He constantly lied to investors about the sweet returns his fund was getting. He later on met some European conmen who dissuaded him and stole more than $10 million. Later on, he falsified his suicide before being arrested. This book will help you understand the ups and downs of being a trader and how grand heists are achieved.
Trading Books – Millionaire Traders
This book was written by Kathy Lien, one of the most popular traders and analyst. In this book, Lien interviews 13 traders on their trading history, their strategies, and their trading plans. The beauty of this book is that it is in interview form. Each chapter is simply a question and answer session. By reading this book, you will learn from 13 traders who have already made it. You can also replicate some of their strategies.
Trading Books – Confessions of a hedge fund manager
This book was written by ex-hedge fund manager, Lars Kroijer. In the book, Lars explains his journey from a young successful trader in a leading investment back to starting his hedge fund. He also explains how he successfully used arbitrage as a trading strategy. Finally, he explains how his hedge fund bottomed after a number of unfortunate trades. I gained a lot by reading this book. One, I learnt how hedge fund managers raise capital. Secondly, I learnt a number of reasons why hedge funds fall. Finally, I learnt a lot about the psychology of hedge funds.
Trading Books – Day trading the currency market
This is the second book by Kathy Lien in this article. In this book, Kathy gives traders a breakdown of the strategies that she uses to execute her trades. She begins by giving a historical background of the financial market. She then goes on to describe a number of factors that move the financial market. Then, she writes about various strategies that you can use as a trader. The benefit of reading this book is in the knowledge that Kathy shares. It is after reading this book that I developed the trading system am using currently.