I am so impatient to get back to trading this coming week! But the market doesn’t open until Monday. Click here to read about my story regarding how I learned to trade stocks HERE.
So instead of my usual stock research, I am reading some of my many stock trading books. One book that has helped me more than anything else to understand the momentum stock trading strategy that I love so much is “How to Make Money in Stocks” by William J. O’Neil. Written in 1988, the strategy and information contained in this book is just as relevant to todays trading environment as it was back then. Below I outline some of the most amazing things I learned from this book and why it is the best book for learning stock trading.
1) The book contains over 100 real charts that are annotated to help you apply the principles you learn in the text. This really helps train your eyes and avoid some of the main mistakes many new investors/traders make.
2) It covers concepts that are not intuitive such as “buy high and sell higher” instead of bargain hunting.
3) it has tests to prove to you that you CAN predict where charts are going to go. The author shows you a chart and then asks you to apply principles that you learn in the text and select the most likely chart to give you profits. The answers are revealed and explained so that you can check and see if you would have made some good gains.
4) Explains simple concepts that people often over look! For example is your stock in an uptrend or a down trend? Don’t buy stocks that are trading below the 200 day moving average EVER! Also buy industry leaders not cheap pennystock crap! Pennystocks below $1 a share are often trading that low for a good reason…
This book has helped me so much to apply other strategies and make decent money in the stock market consistently. I hope this post inspires even just one person to read this book and benefit the way I have from it. Update: I wrote a more detailed review of this book here https://barbour2.wordpress.com/2014/11/28/review-how-to-make-money-in-stocks/