I don't know much about this area yet, so take what I have to say with a pound of salt. But what I have read says keep the risk per trade small (2% is max). The risk I am talking about means purchase price - stop loss price x # of shares = the amount you are willing to risk. ie: if you risk 1%...
Re: Which books should a beginner read?
I am still a beginner and I have found these books most helpful:
Technical Analysis: The Complete Resource for Financial Market Technicians by Charles D. Kirkpatrick II CMT and Julie R. Dahlquist
The Three Skills of Top Trading: Behavioral Systems...