There are thousands of books on trading. Most are a one time read without much knowledge gained. However, there are a few worthwhile books that should be in every trader’s library. Books that can help us understand the markets, understand indicators, understand ourselves. Some of these books can be read again years later and new insights gained when we are at different levels in our trading. I went through my bookshelves and pulled our what I thought are some of the best. I try to read every book I can get my hands on and the following list is what I consider some of the best. I know I’ve left many out and will add to this list. If you do choose to purchase please use the link provided. If you hover over the link you’ll see an Amazon picture with price. If you click on the link or the pop-up image it will take you right to the Amazon page. Many of the books are available used at a reduced price. I am an Amazon associate so I receive a few pennies on any sale which helps support this site.
The Only Three Questions That Count: Investing by Knowing What Others Don’t This is absolutely a great book. I disagree with Ken Fisher’s views on technical analysis and active trading and many other things (who am I to argue with someone on the Forbe’s 400 list of wealthiest people) but his insights into the mental aspects of the trade, his debunking of most Wall Street “facts” is the best I’ve read ever. This leaves all the trading psychology books in the dust. It’s a huge book. Over 400 pages. I had a hard time putting it down.
Beat the Market: Invest by Knowing What Stocks to Buy and What Stocks to SellA great new book on stock picking, written by a longtime and well respected analyst. This book is inexpensive and a fast read, but packed with useful information.
Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders This is another book destined to become a classic. The Turtles were trend followers in the futures market, and much of this book is about their technique and psychological challenges following a system. However, as with the Fisher book above, much of the insights to be gained are the same whether you are a day trader or a position trader. This is a short read. Good thing, because you’ll probably read it many times. It’s excellent.
The Commitments of Traders Bible: How To Profit from Insider Market Intelligence (Wiley Trading)This is an excellent book written by one of the most knowledgable people on the subject of COT data. The information in this book can provide the trader with a real edge.
Pit Bull: Lessons from Wall Street’s Champion Day Trader I’ve read this book many times and gain new insight with each read. Marty Schwartz is one of the best screen based, off the floor traders in the world. What he has to say is well worth taking in. It’s quite entertaining as well.
Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude I include this book because it has become sort of a bible of trading in many chat rooms. I’ve read it four times and find fault with some of his concepts, but I keep coming back to it because there are many insights that address various trading problems. With each read I discover a bit more. It’s the kind of book you can pick up when in a slump and looking for answers.
The Snowball: Warren Buffett and the Business of LifeThis is the new book about Warren Buffett. I haven’t read it yet, as it hasn’t been released at the time of this post. But it can be pre-ordered here. I will update this blog as soon as I’ve read the book.
Mind over Markets: Power Trading With Market Generated Information This is an often overlooked book in trading literature. But it is a gem. Most people who know Dalton know he’s a Market Profile guy and if they aren’t into Market Profile they don’t bother with this book. Some of the book is on the mechanics of the Profile, but most of it is on the concept of the auction market, which ultimately the Profile tries to display. The up and down seemingly random motion of prices is put into the context of the auction process and price discovery. Price movement starts to make sense when you learn what the market is trying to tell you. This book explains it better than most. It’s well worth studying even if you disregard the sections dealing with the Profile. I pity the people who think you can trade without prices.
Reminiscences of a Stock Operator (Wiley Investment Classics) This is the number one classic of trading books. I have little to add to all the praise this book has received for many decades. If you haven’t read it now’s the time.
Street Smarts: High Probability Short-Term Trading Strategies Linda Raschke is one of the best trading educators out there. This book is expensive and some of it outdated in my opinion, although her core strategies of buying bullflags and breakouts from low volatility and swing point breakout failures etc still are viable strategies. Mostly she is inspiring to read and listen to. There are other ways of getting much of the information in the book that I will list in the links section. However the book is worth buying if you don’t mind the price, and there are often used copies around.
Rocket Science for Traders: Digital Signal Processing Applications This is a tough read for those not mathematically inclined. But it is worth the effort. Understanding cycles is an important area of research if you rely on technical indicators. I use his code and will have much to say about it in my articles section.
Cybernetic Analysis for Stocks and Futures: Cutting-Edge DSP Technology to Improve Your Trading (Wiley Trading) This is a more recent addition to digital signal processing as applied to technical indicators. If Rocket Science listed above is over your head, you’ll find this book much more accessible. It is a fairly easy read for a John Ehlers book.
The Intuitive Trader: Developing Your Inner Trading Wisdom I think this is one of the better trading psychology books. It hasn’t received as much attention as most, but I think it more focused and realistic. Some trading psychology books seem to be written by people who you have to wonder if they ever really traded. Not this one. And there are some great interviews.
Martin Pring on Market Momentum Don’t let any of the chat gurus claim they invented trading patterns on oscillators. Martin Pring was writing about this years before these chat room guys knew what trading was. He was one of the pioneers in momentum. His time frame is much longer term, but the concepts are the same. He also wrote Technical Analysis Explained, but I think this is the better book. There are some newer books where he seems to have broken down the subject into smaller chunks that might be worth checking out, but this is the book I’m familiar with and I highly recommend it.
Market Wizards: Interviews with Top Traders It’s always informative to read about successful traders from all different perspectives.
The New Market Wizards: Conversations with America’s Top Traders (A Marketplace Book) A continuation of his earlier work. I think these books are much better than his latest books that re-hash common principals of technical and fundmental analysis.
Technical Analysis for the Trading Professional Arrogant and irritating in writing style, but very informative. She has some good information on indicator interpretation.
The Way of the Warrior-Trader: The Financial Risk-Taker’s Guide to Samurai Courage, Confidence and Discipline A fine read when you need a boost in confidence. When I can’t pull the trigger I read a few chapters and I gain a fresh perspective on risk.
Trend Following: How Great Traders Make Millions in Up or Down Markets, New Expanded Edition, (Paperback) I think this is one of the better books on trend following. It makes a good case for a longer term perspective, a perspective that I haven’t adopted, but I think the principles are valid no matter what your time frame.
The Trader’s Edge: Cashing in on the Winning Strategies of Floor Traders, Commercial and Market Traders Some good insights from someone on the inside of the business. Not theoretical nonsense but good, solid perspective from a professional trader. Geared toward short term swing and daytraders. Emphasis on importance of the opening price action. Should be a classic, but largely ignored.
Mastering the Trade (McGraw-Hill Trader’s Edge) An excellent overview of traditional trading techniques and some new and innovative concepts. This would be a good starting book for someone who wants to get up to speed in his or her trading knowledge, as well as a good read for the more experienced trader. You’ll come back to this many times after the first read.
Bollinger on Bollinger Bands Excellent book on the subject of Bollinger Bands by the guy who developed them. But this book is not narrowly focused. It discusses momentum, volatility expansion and contraction, basic charting and support resistance, and many more concepts and how Bollinger Bands help define these concepts. I’ve read through this book many times. Many of the concepts presented here are applicable no matter what indicators you are using.
Viewpoints of a Commodity Trader This book is a little gem. Short one and two page thoughts one trading psychology, trading problems, trading philosophy. This was written many years ago, but still stands the test of time. A classic.
Sun Tzu’s Art of War for Traders and Investors Another book with short, one and two-page trading analogies. A little gem. Not well received by the trading community but I find it helpful to read a few pages here and there. Way of the Warrior Trader is the better book, but it is a more serious read. You’ll either really like it or you’ll think it’s silly.
Trader Vic–Methods of a Wall Street Master A good perspective on defining trends, technical analysis, and much trading wisdom from a real trader. A must have book for your trading library.
Trader Vic II: Principles of Professional Speculation (Wiley Trading) A continuation of his first book, and perhaps the better of the two. There is some overlap, but I highly recommend getting both. You’ll return to these books many time. Vic Sperandeo is one of the truly great traders. So many authors of trading books just write theory and are not really traders, or have very limited real trading experience. Mr. Sperandeo, along with many of the other authors in this list, are the real thing. Take advantage of their knowledge.
The Professional Commodity Trader Stanley Kroll was another real trader. He has much real trading experience to share in this quick read.
Extraordinary Popular Delusions and the Madness of Crowds This is a classic. Everyone should have this on the bookshelves to re-read when whatever market they are trading is in bubble territory. History repeats. Everyone says “this time it’s different” but it never is. The behavior of the crowd and the bubbles that get created repeat over and over throughout history.
How To Make Money In Commodities A classic by Chester Kelter, of the Kelter Channel fame. Very old book, but worth it if you can find a copy. Money probably better spent on some of the newer books that are more affordable.
New Concepts in Technical Trading Systems Another classic from the developer of the RSI, ADX, Parabolic Stop, Volatility Stop, etc. I think he lost his way when he started trading moon cycles with his Delta Society, but this earlier work is probably the backbone of modern day technical analysis. Most of the information can be had by reading the mass of articles on his indicators, but it’s nice to have a copy of what started this area of analysis.
The Profit Magic of Stock Transaction Timing The recently deceased Mr. Hurst was a pioneer of channels and envelopes. The book has a hokey title and it starts to go off the deep end a bit, but it is a classic. Some of the concepts are still valid, although he drew his channels by hand long before the PC.
The Taylor Trading Technique This is probably the worst book ever written. It is awkward in style, very hard to follow, and seems completely out of date. However, the short term cycle he demonstrates is still relevent today. Linda Raschke still uses the three day cycle as a big part of her methodology. She makes constant reference to this book. After forcing myself to perservere the information is starting to make sense.
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