Trading Books for Beginners

Again, thousands of books out there.. How do I know which one to read?

Many books are crap. However, there are also many great books written about trading, different aspects of trading. Some deal with psychology, some with techniques, others about their personal experience. I could come up with a long list of great trading books but I won't...at least not now, not yet. As a new trader, I would recommend just two books for you to read now, to get you started. Remember "just do it"? Just grab the book and read it already. These books may seem difficult to understand at first, but with the help of your free Optionsxpress account that you opened, and with access to the live streaming stock charts, you will be able to learn along with the material in the book and be just fine. Heck, I think I'll just recommend you one single book, in case you're thinking of giving the excuse of not having the time to read two books. :)

So, here it is. Alexander Elder's "Trading for a Living".


This is the Amazon link to the book. A very highly rated classic bestseller by traders all around.

So there you have it. One single book for you to get started educating yourself. It's rather expensive to buy the book...costs SGD132.63 at Kinokuniya. So you may want to borrow it from the library. Or if you want the pdf version of the book, you can request for it at the shoutbox. I can email it to you.

Which Broker?

So many brokers, which one to choose? Go for good customer service and affordability. Affordability can mean different things to different people. Some value low commission fees, others value the trading platform and tools the broker provides.

Below is a table of Barron's 13th annual rankings for top US online brokers in 2008:



You may like to read more about it here and here

I have 3 trading accounts in total with 3 different brokers - Optionsxpress, Interactive Brokers & Thinkorswim.

If you want my recommendation, it will have to be Interactive Brokers (IB) for its low commission fees. However, the customer service for IB may be difficult to reach at times. Also, the trading platform is very simple and plain. If you can afford the commission fees which is also relatively low, I highly recommend Thinkorswim. Their trading platform is very user-friendly and the customer service is excellent.

I haven't used the other online brokers, so I cannot comment much, but according to many traders I know, they also prefer IB and Thinkorswim.

In my earlier post, I advised mums who are interested in trading to "just do it". By this, I'm not suggesting you just jump in to trade with real money expecting to do well. What I mean is for you to familiarize yourself with the stock market and trading. How better to do so than to watch the stock market live quotes and stock charts ticking away in real time. You can do so by opening an account with Optionsxpress. Opening an account with them is absolutely FREE and you will have access to live stock market quotes and charts when the US markets open. I highly recommend newbies to do this as this is the best way one can familiarize themselves with the stock markets.

live streaming stock quotes from Optionsxpress


live streaming stock chart from Optionxpress

By the way, the US market opens at 9:30 A.M Eastern Standard Time, which coincides with Singapore's 10:30 P.M or 9.30 P.M, depending on daylight saving time. What this means is that you can take care of your baby throughout the day, and then when they fall asleep at night, you can take some time out to do some trading at night, which can be as little as 1-2 hours.

What Do I Need To Get Started?

As I mentioned in my earlier post, one can trade anywhere in the world with just a laptop and an internet connection. There are two other things needed to get started on trading. They are a broker and education.

1) Laptop/PC and internet connection

If you are reading this blog now, you probably already have a laptop and an internet connection. So I don't need to say much except to caution you to upgrade if your laptop/PC or internet connection is unstable or too slow. Otherwise, there's nothing you need to worry about.

2) A Broker

When I say broker, I mean an internet broker and not one which you have to call to make your trades. An internet broker provides the trader with a trading software/platform which will enable you to execute the trades yourself on your computer. First and foremost, you will have to decide which stock market you would like to trade in. The Singapore stock market or the US market? There are brokers specialized for each market. The important things to look for in a broker are reliability, commission fees and customer service. There are online reviews of brokers that you can read about. Feel free to ask if you need my broker recommendation.

3) Education

Before you start trading real money, you must educate yourself on the stock market. There are several ways you can do so. The most common ways are to read up on books and to attend stock trading seminars/courses. I know that many new traders who are interested to learn about trading are so overwhelmed by the amount of information out there that they don't know how and where to start and they just give up without trying. I was also clueless and confused when I first started out. One advice I can offer is to "just do it". By this, I mean just get started reading about the stock market. Without any knowledge whatsoever when I just started out, I attended a trading seminar which cost $1,800 a couple of years back. I believe trading/investment courses still cost around this much now. So-called gurus will offer a free trading seminar preview to encourage the public to sign up their courses. After going through two trading seminars, I would advise mums not to attend such seminars/courses for the reason that they are over-hyped and too costly. One can learn more through reading from books. There are also trading courses on DVDs that cost over a thousand dollars. Education need not be so expensive. If you are interested in trading courses, let me know. I have the email of somebody who is selling at far less the cost price. Anyway, the best place to start is to read from books. You can borrow them from the library. Our libraries have a lot of books on trading.

What is trading for a living?

Eileen and Jasmine have asked me to explain more about trading. When I talk about trading, I am referring to trading stocks. Unlike most other jobs, trading stocks is one profession which anyone can engage in, and with the right mentality and money management, make some money out of the stock market. You may be thinking to yourself, if it were so easy, everyone would be making a living out of the stock market and not working. Bingo! You are perfectly right. This is precisely why trading cannot be so easy! If it were, everybody would be winners and there would be no losers. But as we all know, this is not possible. There will always be winners and losers in the stock market. There are many amateurs out there who think of making a fortune in the stock market without working. You've probably come across books in the bookstore with titles like "Secrets of millionaire investors" or "How I made $2 million out of the stock market". And if you are thinking about that now, erase that thought from your mind immediately! Our purpose of trading is for mums to work from home and earn some small income to support themselves. Let's put it this way. Stocks move up and down time to time. It is more often and more likely to make small gains than huge gains. So, are you ready to earn some money trading stocks now?