Book Reviews: Intermarket Analysis by Murphy and Market Wizards by Jack S.

In my opinion, these are the two books trading novices should read first. Market Wizards is written for the average layman-the technical terms are sparse, but enough to familiarize yourself with the very basics if you have Wikipedia by your side, and is more of a character study of traders themselves. Perhaps it is just me, but one of the most intriguing aspects of anything I've enjoyed is the profiles of individuals partaking in that activity. Eccentric personalities abound in this classic tome, and you really get a feel for the type of people who are attracted to trading. When reading this, you should continually be asking yourself how well you can identify with the people being interviewed. You will never succeed as a trader if you don't have the right mindset or personality for it: Can you cope with continual losses lasting up to several months? Are you willing go with your gut when you find a profitable position? Do you have the discipline to follow your system when every technical indicator and chart is telling you to go the opposite direction? This book is a must for anyone beginning to consider trading for a living.

Intermarket Analysis appeals to a broader demographic: it hardly focuses at all on trading or strategies, but is more like an indepth look at macroeconomic tendencies. For traders, many people recommended me to read Pring or Murphy on technical analysis to begin with. I strongly disagree with this advice and feel that narrows your market analysis and could have you barking up the wrong tree for several years. Intermarket analysis focuses on the fundamentals of market movements and is increasingly important in this day and age given the rising economic prosperities of other countries, something a lot of people can relate to if they follow global news at all. What happens to the aggregate price of commodities as the dollar weakens? How do other countries benefit (or suffer in some cases) when America raises interest rates? How can we use bond and yield curve charts to forecast economic conditions? Really, this book focuses heavily on how currencies, commodities, bonds, and stocks are all inter-related, a key concept I know many overlook.