Answered by Jay Adward, a BetterTrader.co analyst
For anyone interested in trading, a foundation in economics is essential. An understanding economic principles is relevant for any market. Here are some books that I would start with:
- The best place to start with regard to learning about any subject would be to understand its history. In this case, that’s understanding how the modern-day subject we call ‘economics’ was created. To understand this, I would highly recommend the book “The Wealth of Nations” by Adam Smith. This book was written in 1776. It is widely considered to be the most comprehensive outline of the popularization and implementation of modern capitalism that shaped the modern-day world economy.
- I would recommend “A Little History of Economics” by Niall Kishtainy if you are looking for a more basic, question and answer style regarding the study of historical economic significance. The book is designed for a younger audience, who are less interested in reading a story like history book.
- Another route that can be taken is to look at economics from a very basic factual perspective. For that I would recommend a book called “Economic Facts and Fallacies” by Thomas Sowell. This book is great for someone with zero background in economics, who is interested in debunking common economic myths. It provides fundamentals based on pure fact, which allows for a more productive understanding of economic theory.
- Another book that gives the basics, but also provides more in-depth information is “Basic Economics: A Citizen’s Guide to the Economy” by Thomas Sowell. This book details the economic problems of multiple countries around the world and how they are have had an impact globally as well as nationally.
- An alternative option would be to read the textbooks used for introduction to economics classes in college. For that, I would recommend the books “Microeconomics (The Pearson Series in Economics)” by Daron Acemoglu, David Laibson and John List, and “Macroeconomics (The Pearson Series in Economics)” by Daron Acemoglu, David Laibson and John List. Microeconomics is the study of economics at an individual, group or company level. Macroeconomics, on the other hand, is the study of a national economy as a whole. Both are equally important in understanding economics and both of these textbooks break each respective topic down to a very simple, beginner friendly, level.
- All of the information about economic data is only useful if you understand the basics of how to be an economic trader. To understand the fundamentals of being an economic trader I recommend that you read “Essential Guide to Trading Economic Events”, an e-book written by traders at BetterTrader. BetterTrader is a platform developed by traders, for traders. You can download the e-book here.
This is by no means an exhaustive list. With thousands of books about economics, there are lots to choose from, and these are just some of my favorites. If you’re an avid reader and you’re interested in more good books, check out this list of 10 essential book for traders.