The training of a trader goes through different stages, but in all of them it is more than necessary to have a good bibliography to reinforce the knowledge acquired and progress adequately in trading. The literature in this regard is very extensive, so in the end, the trader will have to do the selection work that best suits his profile and interests.
In addition, the training of the trader requires learning in different topics, which can be divided into technical analysis, trading as such and psychotrading. To these three epigraphs another one of general reference works can be added. Taking into account this division, at finance.com we have made a selection of the essential books to learn how to trade from scratch.
1.- Technical analysis books
Technical analysis is the raw material with which traders work. To be precise, it can be divided into “chartism”, which only uses graphic patterns, and technical analysis itself, where other elements already come into play, such as oscillators or mathematical formulas.
Typically, “chartism” is considered to be part of technical analysis. This in turn can be defined as a set of techniques that try to study the market through the action of prices.
Everything is based on the existence of patterns and trends defined by the movement of prices, understood as the result of the interaction between supply and demand. After all, the graph is the trail left by money, the result of the battle between bulls and bears. The essential works are.
A.- ‘Technical analysis of financial markets’. John J. Murphy.
This book is considered by many experts as the Bible of technical analysis, the work that should not be missing in any trader’s library. Its first edition is from 1986, when technical analysis was practically unknown, but it already dealt with crucial topics, such as the Dow Theory , the construction of charts, the different types of trends or even Japanese candles.
More than thirty years later, it is still fully valid. “It is the bedside book for any technical analyst, it touches all aspects with rigor and depth”, says Josep Codina , technical analyst at INVERSIÓN y Finanzas.com
B.- ‘Long Term Secrets to Short-Term Trading’. Larry williams
The author of this book, Larry Williams , is one of the most reputable technical analysts of the last decades. It offers a clear view on a wide range of topics, such as profit patterns, breakouts, volatility, as well as an analysis of the best strategies and indicators. In Codina’s opinion, this work is also essential.
C.- ‘Fundamentals of Technical Analysis’. Carlos Doblado and Isaac de la Peña
It is one of the best technical analysis books written by two Spanish authors, Carlos Doblado and Isaac de la Peña.
It is ideal to start from scratch in the study of technical analysis, precisely it addresses the fundamentals of the discipline. For example, before operating a figure it is necessary to understand where it comes from. It is also a work of a markedly chartist nature, where investor sentiment is analyzed in depth, rather than reviewing the many oscillators that exist in the matter.
D.- ‘Japanese candles’. Steve Nison
It offers a complete overview of Japanese candles and the techniques to follow the market with these tools.
It is another of the works that Codina selects , as it offers “all the candle patterns explained as well as their interpretation, operational implications, frequency. It is quite essential not to stay in the topics. Japanese candles are essential for certain assets, especially for commodity trading, and Nison goes beyond concepts, explaining the psychology behind these ancient tools.