How to read a trading book

Do you expect to become a doctor, just by reading a book, or dozens of books? Or do you think that a doctor needs practice, needs to think about what he’s learning? Reading books is a very important step in becoming a better trader, but that’s not enough! You will not certainly become a successful trader just by reading 20 books, even if they are very well written books by the authors who actually make money by trading.

Reading from cover to cover

A lot of us believe that, by reading a trading book from cover to cover, we will get all the necessary information for trading profitably the method that is described in the book. But this is almost never true, because there will be a big difference between how we see the things and how the author of the book sees them. This way he may omit some information, because it may seem too obvious for him; surely it will not be for us, so we will have a lot of doubts. In the end we may understand a completely different thing. So reading from cover to cover, like reading a novel, without thinking about what we read, it’s not the best way to read a trading book. This may be good only in the very beginning phases, even before getting in front of the charts, for getting some general information about trading.

Reading from cover to cover creates a chaos

What do we have in our mind after reading a trading book with a bunch of information, describing a lot of indicators and chart patterns? For sure it’s a chaos. That will not be structured information. And what we usually do after finishing reading a book? We take a look at the chart and we try to find the patterns we’ve learned, but at this point we still can’t put everything together, so we will “adapt” the situation to make it to fit the pattern, and we will see only the profitable trades.

The best way to read a trading book

I think that the best way to read trading books is to read it slowly and to test suddenly the concepts we learn. We should test only one thing at a time, we just don’t have to worry about the profit at this point. It’s important to understand and to be able to apply the new concepts that we have just learned. If we have some doubts or some ideas on how to improve what we’ve learned so far, we should write that down. We should write down questions, like: “Where do I place the stop-loss?”, “Where do I take profits?”, “When should I trade?”, “How do I filter this stuff?” and so on. When we are done with the questions, we should try to answer them and to think what the solutions may be. When done with these, we can continue to read and to try to see if the author answers our questions. And when we’ve got some new information, we do the same thing. After doing it, we should try to link it to the information we’ve tested before. Believe me that this method of reading a book is better than reading ten books from cover to cover and then trying to test everything.


Don’t think that if you will read a trading book from the beginning to the end, you will understand the things better, and it will help you to structure the information. For structuring the information you need practice. By practicing you will see real chart situations and it will make you think, maybe this way when you will continue reading you will understand better what the author actually wanted to say.

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Posted in Newbie Traders, Trading Tips

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