Welcome back to the blog and the first book recommendation of 2021! I am often asked if I know of any books that might help with learning a specific area of trading and finance and that is the main reason for me starting this blog post series back in 2019.
There are two main types of analysis when trading and investing in the financial markets; technical and fundamental analysis. I am primarily a technical trader and you will see this from the various analysis I post including momentum trades, trend based trading and also my popular trading volatility series.
Although I consider myself a technical trader, I am always conscious and aware of the larger macroeconomic and financial market fundamentals that are moving price. And that is where this book club recommendation comes in to its own.
This months book recommendation is Ratio Analysis Fundamentals by Axel Tracy.
From amazon – There is so much we can do with financial data beyond the mere compliance-required record keeping. Ratio Analysis Fundamentals teaches you the fundamentals of one of these extra applications: ratio analysis. This application allows you to take data from the financial statements & internal business records and evaluate performance, risk & efficiency and allows benchmarking and viewing trends over time.
Ratio Analysis Fundamentals will give the financial statement novice power to add value to business and investments.
When trading stocks, there are key financial ratios that indicate the past and potential future performance of a business aswell as the potential for both growth and income (dividends). If you are wanting to start picking individual stocks for your portfolio or ISA or SIPP then you should be fully aware and understand the ratios explained in this book.
Ratios are part of all trading. Even day traders and forex/commodities traders use ratios to calculate and record potential and actual returns from trades (reward:risk ratio) as well as trading costs and other metrics. Make sure you get to know them.
Both paperback and e-book copies can be purchased via the links below.
Paperback Edition – https://amzn.to/3iYi1wN
Kindle Edition – https://amzn.to/3pvi8SR