What Can You Learn From The Best Trading and Wealthtech Books?

What Can You Learn From The Best Trading and Wealthtech Books?

by March 12, 2020

If you want to make money from the markets, you have to understand the markets. You might feel like there’s no substitute for experience when it comes to developing the intuition you need to be able to succeed on the markets. To an extent, you might be right. But there is a way to accumulate knowledge and experience quickly – and that’s becoming well read. In this post, we look at how being a voracious reader can be of real benefit to you in your quest for greater wealth…

The secret of success from those who’ve made it

Many successful people are happy to talk – and write – about what took them to the top. Everyone’s journey may be different – but reading their stories, understanding the decisions they take and consuming their analysis of the markets can help to inform your decision-making. Read books by the likes of Warren Buffett to tap into the secret of their success. This isn’t about copying others – it’s about potentially following their lead and learning from their mistakes.

How not to do it, from people who’ve made mistakes

If someone tells you they’ve never made a mistake when trading, they’re lying. Everyone does. The markets are too complex and unpredictable for people to go error free. It is, however, good to understand common mistakes and learn, where possible, to be able to spot the signs and avoid as many mistakes as possible.

Edwin Lefèvre’s ‘Reminiscences of a Stock Operator’ was recommended more than any other title for IG’s Top Ten Trading Books partly with this in mind. IG Dealer Ludwik Chodzho-Zajko, who selected the book, said book – a thinly-veiled biography of Jesse Livermore – contains timeless lessons from a century ago.

Ludwik said: “It’s fascinating to read about someone that lived so long ago that basically goes through the same thoughts and emotions that you would today if you’re just starting out as a trader.”

Key lessons from history

Lefèvre’s book is still relevant today, but also offers us some lessons from the past. Many other books are also able to look at the past and explain trends, crises, successes and failures from the history books. Whether it’s the Wall Street Crash or the 2008 global crisis or anything in between, learning from the past informs the present. Bull: A History of the Boom and Bust is a great example of a book that does just that – dissecting the markets post-1982.

In a review for the New York Times, Holly Hubbard Preston wrote: “More than just a well-organized post mortem on the last stock market boom, “Bull!” also offers individual investors prescriptive data on how to position oneself for the next bull-market cycle, as well as proven benchmarks for evaluating and selecting companies.

The all-important context of the world we live in

The markets don’t operate in a vacuum. The world around us sets the context in which the markets can operate. Geopolitics, for example, has a direct impact on things such as oil prices. Pandemics such as the coronavirus also have a huge influence on the world economy. Taking the time to read more widely – be it on disputes in regions such as the Middle East or on the potential impact of the next wave of technological change – will help you to understand how the world is changing and the reason why markets may or may not react to certain events. Books that help to understand that context will be invaluable. From Yuval Noah Harari Homo Deus to Klaus Schwab’s The Fourth Industrial Revolution, there’s much knowledge to take on board.

The confidence to jump on new trends

Successful traders understand what’s changing and what’s coming next. Trends such as wealthtech offer new opportunities for investment and wealth management – but also, importantly, offer new tools and platforms to be able to trade and manage a portfolio. It’s easy to fall behind the latest trends, however. You can try to keep up with the news on a trend like this – and that will help – but a book encourages you to take a deep dive and have the sort of thorough understanding you’d need to be able to use this with confidence.

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