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Choosing The Best Trading Books

Jul 26, 2008
When it comes to trading any instrument (stocks, bonds, CFDs, forex etc), there are many resources out there to help you learn the ropes. Online courses, seminars and even one-on-one training are available. But sometimes the best way to learn is the old-fashioned way - reading a book.

Reading a book has the advantage of being substantially cheaper than most courses and seminars available. Books allow concepts that are not immediately understood to be reread as many times as necessary. The question is, which trading books are the best trading books?

Be wary of any book that makes outrageous claims in its title or cover "Become a day trading pro in an hour!" or "Turn $1,000 to $1,000,000 in months!". These books will underestimate or neglect to teach the inherent risks associated with trading. Risk management is even more important than trade selection. No point selecting winning trades only to have all your profits wiped out because of one trade where risk management was neglected.

There is a common misconception trading is a fast paced, exciting activity very similar to gambling rather than a calculated, measured (almost boring) activity. Any quality trading book will give calm, reasonable, practical advice on trade selection, money management, risk management and trading psychology. This restraint suggests that author knows the market and is simply explaining what he/she has learned.

On the other hand if the language is fast paced, showy and glitzy it is an indication that the author has written the book as entertainment rather than a serious trading book. The author's goal is to sell books rather than educate the reader on trading.

Take note also of the book's presentation. Is it riddled with grammar and spelling errors? Is it an ebook sold by some guy off his web site? If it is, it may not have been professionally edited. This in itself is not a reason to discard it, however, does it come with a 100% money back guarantee for a reasonable amount of time? If it doesn't the author is unwilling to put his/her money where his/her mouth is. After all, they are making money following their own advice aren't they? They should be able to offer a guarantee.

When considering a trading book, it's worth taking a few minutes to Google the author's name and see what comes up. Are there reviews of the book written by actual readers (not just testimonials on the author's web site)? Has the author been mentioned in any news stories? What is his/her background? Does he/she have any real world trading experience, or do they just write trading books?

The best trading books will treat trade selection, money management, risk management and trading psychology as equally important to becoming a successful trader.
About the Author
Sharon Reid is creating a self improvement website for those wanting to create abundance in their lives. She believes that everyone should have multiple sources of income. CFD trading is one of her sources. Her trading plan is available at her website.

Visit her website here.
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