Top Five Trading Books
Trading attracts intense people. If you trade there’s a good chance you are quite passionate about it. And if you stick around long enough to become profitable, you are probably intensely – obsessively, even – passionate about trading and everything to do with it. I know that I am. When I’m not trading, I’m teaching, scanning, reading market news, talking to other traders, or reading about trading. Here are my top five trading books!
Market Wizards – Jack Schwager
Imitation is the most sincere form of flattery. Or so the saying goes. While I’m not sure about that, I can tell you that imitating what successful traders are doing is a great way to learn how to trade. This book comprises a series of interviews with some of the best traders in the world. While it doesn’t delve into great detail about their strategies, it hits the high points. Perhaps more importantly, it provides insight into their mindset and philosophy. You’ll notice some recurring themes, as well. And if you enjoy this book, Schwager has written several others in a similar style – check em out!
– Market Wizards, Updated: Interviews With Top Traders, by Jack D. Schwager
Trade Your Way to Financial Freedom – Van K Tharp
Imitation will only take you so far. That’s why I added this book right after Market Wizards. In Trade Your Way to Financial Freedom, the author will show you how to develop a trading system that serves your individual needs. It also hits on some crucial topics that many trading books gloss over, like position sizing and effective entries and exits. While not as sexy as a bunch of glossy, full0color charts, these topics are vital to trading survival.
– Trade Your Way to Financial Freedom, by Van K. Tharp
Technical Analysis of Stock Trends – Edwards and McGee
This book is the bible of technical analysis, with a place on the shelf of every technical trader in the world. It’s difficult to believe there was a time when technical analysis didn’t exist as an approach to trading, but there was. This book helped develop and codify it, with the first edition coming out in 1948. It goes into great detail about the most important technical patterns and what they tell you about a stock’s past, present and future. If you want to really understand technical analysis, this is the book to get. Just be sure you buy the newest edition, as older versions have information that is no longer relevant.
– Technical Analysis of Stock Trends, Tenth Edition, by Robert D. Edwards, John Magee
The Master Swing Trader – Alan Farley
This book is eminently practical. A lot of trading books have vague, occasionally helpful information that takes a lot of work to apply in the real world, if that’s possible at all. Nearly everything in this book is actually useful and backed up by chart examples and data to show you how it works. Additionally, it covers something vital that a lot of trading books leave out: how to actually find actionable setups. While particularly valuable for swing traders, I’d recommend this book to any active trader.
– The Master Swing Trader: Tools and Techniques to Profit from Outstanding Short-Term Trading Opportunities, by Alan Farley
Reminiscences of a Stock Operator –
This book is a classic, even among non-traders. It’s a thinly disguised biography of Jesse Livermore, one of the first and most famous active traders. It is endlessly entertaining, and has some timeless quotes about trading and a trader’s mindset. You’ll also recognize many truths that will apply to your experience, such as:
The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.
AND
It seems incredible that knowing the game as well as I did and with an experience of twelve or fourteen years of speculating in stocks and commodities I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play, but all I can say in extenuation is that it wasn’t really my deal, but Thomas’. Of all speculative blunders there are few greater than trying to average a losing game.
– Reminiscences of a Stock Operator, by Edwin Lefevre
So those are my top five trading books! But perhaps my all time favorite is my own – it’s the book I wrote to include with my 60 Day Bootcamp. It incorporates a lot of what I’ve learned over the years from other books and my own experiences, but with a spin that’s all my own. Shoot me an email and I can tell you a bit more about it – kunal@bullsonwallstreet.com
