Reading is important for all of us and traders and investors aren’t an exception. Once George Martin, an American Novelist, and short-story writer said, “A reader lives a thousand lives before he dies… The man who never reads lives only one.” This isn’t just an inspirational quote to inspire people to read. This is the reality because reading widens your mind and enhances your knowledge.
Reading is beneficial beyond any stretch of your imagination. It benefits you in all aspects of life and not only in trading and investing. In fact, you can become a better trader with financial literacy and for that, you need to cultivate the habit of reading. Given the importance of reading for traders and investors, we are going to discuss how reading is important for you as a trader and investor. Let’s begin right away.
Why is reading important for traders and investors
Reading for traders and investors is important because reading offers knowledge. As you know, knowledge is power. The more you read, the more you learn. The more you learn, the better your trading gets. In fact, reading and trading efficiency are directly proportional to one another. Your trading efficiency and productivity get better and better with reading. How so? Because you have more knowledge to make informed trading decisions.
You might be thinking that there are multiple ways to learn about trading. Yes, there are multiple ways to learn new things. You can learn from practice, experience, trading gurus, and so on. However, nothing is equivalent to reading. Believe me, when you read trading books, financial websites, newspapers, etc., your knowledge increases rapidly if your reading sources are comprehensive enough. Here are a few advantages of reading for traders and investors.
- Enhances your knowledge
- Empowers you to prevent making mistakes you can make without reading
- Expands your skillset
- Enables you to learn from the most successful and experienced traders
- Makes you understand how different market forces work
- Transforms your trading mindset and psychology
- Makes you know and understand new terminology
- And much more
How can a good reader become a better trader or investor?
Let me ask a question here. Can a knowledgeable person and one who knows nothing be equal? Or can a person with extensive knowledge and one with minimal knowledge be equal? No, they cannot be equal. A good reader has better insight into all standard financial instruments like stocks, forex, cryptocurrencies, bonds, etc. They can better build their portfolio that maximizes return on investment. In addition, knowledgeable traders also understand behavioral finance. They know how emotions affect our trading decisions.
Simply put, would you want to risk your hard-earned money in trading’s risky arena? This arena is full of surprises, uncertainties, and challenges. Therefore, you need to keep reading to enhance your knowledge to cope with all the challenges coming your way. Finally, your analysis of the market has to be precise and accurate to make good trading decisions. Again, reading comes to the rescue as you can transform your analytical skills through reading. So, make reading your best friend in your trading and investing journey to maximize the odds of success in your favor.
Online resources vs. books
The advent of the internet has made it remarkably easy to learn about anything. Google has become our best friend. We just search, read, and learn. Wow, that’s as cool as you like. However, always remember that not all online resources are credible enough to base your financial decisions on. Moreover, almost all online resources present a bigger picture of the subject you search for. It doesn’t tell you about smaller pieces that make a bigger picture. Here books come to your rescue as it is a matter of financial decisions. You cannot base your financial decisions on someone’s blog or article.
Authors of books are often individuals with extensive knowledge, experience, and expertise. Additionally, most of them are famous personalities you know about. Learning from them is a completely different scenario. These authors explain every aspect of your topic. They explain extensively and with real world examples to make things crystal clear. Therefore, read books for comprehensive and extensive learning. It doesn’t necessarily mean, however, that online resources are not credible. They may be credible but they don’t offer the comprehensive and extensive knowledge you need to reach the next level of trading and investing.
The best trading and investing books for reading
- Market Wizards
- The Intelligent Investor
- The Warren Buffett Way- Robert G. Hagstrom
- One Up On Wall Street – Peter Lynch
- Little Book of Common Sense Investing: The Only Way to Guarantee Your
- The Intelligent Investor-Benjamin Graham
- Fair Share of Stock Market Returns
- Stocks to Riches – Parag Parikh
- Morningstar’s 30-Minute Money Solutions
- The Little Book That Beats the Market
- Beating the Street- Peter Lynch
- A Random Walk Down Wall Street
- Reminiscences of a Stock Operator
- The Millionaire Next Door
- Trader Vic II: Principles of Professional Speculation
- Broke Millennial Takes On Investing
- Guide To Indian Stock Market- Jitendra Gala
- The Five Rules for Successful Stock Investing
- Bulls, Bears, and Other Beasts – Santosh Nair
- How to Make Money in Stocks
- A Simplified Approach to Option Strategies
- Options, Futures, and Other Derivatives by J.C Hull