How to select good stock market book

Reading a good stock market book is an important part of trading and investing education. The knowledge that is published in good book about investing in stocks or in best books for traders is important for the learning process. You have to learn to trade or invest in equity markets profitably.

But how do you to select the best book? What are the most important categories that should be selected by every beginner who wants to actively invest in shares or do short-term swing trades or apply some daytrading strategy?

I have studied many books during my 10 years of private trading and I have found several important topics that should be covered by stock market books. I have found that there are some really great books for investors or traders but also many books that are not worth a penny.

The only option to select a good stock market book and avoid a bad book on trading or investing is to read opinions of other readers. It is extremely useful.

Categories of best trading books

Stock market books could be divided into several categories based on topics that they describe.

Books for absolute beginners

These books for beginners describe basic terminology of stock trading. Other titles describe the basics of investing in shares.

The specific categories are titles that describe technical basics of the stock market, details how on stock exchanges work, what are specialists and market makers and more.

Books about analysis of the stock market

There are many different ways to analyze shares. There is fundamental analysis of the market. There is technical analysis of stocks. Titles from this category describe details on how to use one or both of these approaches. Both ways, fundamental and technical, have their own pros and cons and what you will need and will use is based on your style.

Stock market trading systems descriptions

This category represents books that describe creation of an investing or trading system. There are many titles that fit into this category and it is not easy to find the best one.

There are also titles that describe only some part of the best systems for traders, like market screening or how to find the best pick for trading.

Books on psychology and risk management

These books describe advanced techniques that are useful for stock traders and investors. Such books cover topics like trading psychology or techniques for specific risk management in investing.

This is a very important category and many investors and traders do not pay enough attention to it. But I would like to note that the profitability of every single trader and investor is always based on his/her ability to handle emotions and manage risk in his/her portfolio.

Conversations with traders

Another category is books that contain conversations and interviews with professional or private traders. These discussions provide very good education, as they provide direct insight into the minds of successful money managers. The most valuable information is often hidden in one or several single sentences that could be found in these interviews.

Tip on how to learn the most from these books

My special tip is about reading. Read every book once without a distraction. Then come to the book again and use a notebook. Make notes during second reading. It is a much better approach than trying to understand everything during one reading of the book.

It is also very good to read the book again after some time. As you gain experience, you will better understand what the book is about. You will see the significance of text that was previously not so clear to you. And you will always discover something new that you missed during previous reading.