The Market Wizards Series – Jack Schwager: Chances are you will find these books on the shelf of any serious trader. They are without a doubt the most comprehensive collection of interviews with superstar traders ever published. However, their dirty little secret is that although they capture perfectly a moment in time, they are extremely dated and will give you almost no insight into today’s markets or how to trade them. Their value now is in showing how even the greatest traders initially struggled and often blew up (repeatedly) before becoming successful.
Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets – Stan Weinstein: This book was the first to quantify one of the most important concepts in trading; the four stages in which stocks move, which are the basing, advancing, topping, and declining stages. Despite the fact that the cover of this book has not been updated since it was published in 1988, stage analysis is still relevant today.
How to Make Money In Stocks – O’Neil: As an unnamed trader friend of mine recently said, all you need to do is review the charts in the first 150 pages of this book and you will be good to go. These charts along with O’Neil’s annotations, give you a great foundation to understand the patterns stocks form before they go on massive runs.
Reminiscences of a Stock Operator – Edwin Lefevre: Tough call on this book, only because I don’t think it is the Rosetta Stone of trading books like it is often described as. The language is dated and colloquial, which though strange, is actually part of its charm. There are definitely some foundational lessons for trading in this book, but you as the reader have to do the historical conversion in your head from venue’s like “bucket shops,” to today’s market.
How I Made $2,000,000 in the Stock Market – Nicolas Darvas: This book should really be called, “How I Made$18,000,000 (Adjusted for Inflation) in the Stock Market,” because that is how much it would be in today’s dollars. That would be phenomenal for anybody, but for someone who did it while traveling the globe, in a pre-internet, computer, iPad, Smart phone world……while working as a professional dancer? Well that is just epic. His “Darvas Box” system, though crude and in need of adjustment to factor in today’s HFT, is still a foundation of a solid trading style/discipline.
The Stock Twits Edge – Howard Lindzon: Okay, before you accuse me of trying to kiss the ass of my blog overlords at StockTwits, let me just tell you that I was recommending this book publicly, way before I ever resurrected this blog, let alone was asked to join the network. This is the book I wish was written when I started trading 25 years ago. The irony though is that it could not really have been written until just recently. It is the “Market Wizards” for the retail trader, and more importantly, each chapter is written by someone who currently has an active presence on social media. Plus it’s the only place you will ever see @The_Real_Fly write two whole pages without saying “fuck!”
The Trading Book – Anne-Marie Baiynd: I like Anne-Marie, but if she had asked me if it was a wise choice to add another trading book to the world, I would have advised against it. I would have been wrong. I was amazed at the scope of material that this book was able to cover, and do so in a meaningful way. Anne-Marie’s economical (and often humorous) style, takes you right to the core of each concept, doing away with irrelevant and superfluous information. I don’t think it is hyperbole to say it is an instant classic for the beginning/intermediate trader.
Japanese Candlestick Charting Techniques – Steve Nisson: There are a lot of books out these on candlestick charting, but almost all of them are derivative of Nisson’s tome. It goes through and explains the basis concepts, as well as the most relevant patterns, related to candlestick charting. Unless you really need to know about the “three-drunk-salarymen-rolled-by-the-hooker-in-the-Shinjuku-train-station” pattern, this book is all you will ever need for candlesticks.
Trade Your Way to Financial Freedom – Van Tharp: Yes the title is cheesy and sounds like something from a late-night infomercial, but this book has one of the best overviews of the different types of methodologies you can use to make money in the markets. But more importantly, it shows you how to go about formulating a methodology for trading in the markets. The information on risk and position sizing alone makes the book worthwhile.
The Disciplined Trader & Trading In The Zone – Mark Douglas: These are the definitive books on trading psychology. I know traders who went from perpetual losers to consistent winners after reading these books. The way Douglas climbs into the psyche of a trader is scary, and there is a good chance you will wonder aloud how he managed to plant the hidden camera and microphones that he used to take notes on your trading deficiencies.
Real World Trading:
Pit Bull – Buzz “Buzzy” Schwartz: Extremely dated, but still the only full auto-biography (I believe) of a “Market Wizard.” It is a look into the mind and process of an extremely disciplined trader who is still putting up crushing numbers to this day. And despite the fact that he shares James Altucher’s somewhat dubious scatological advice regarding “cleaning out the plumbing” before starting the day, it’s a good read. I don’t even know how this is legal, but you can read the whole book online for free here.
One Good Trade – Mike Bellafiore: If you want to know what it’s like trading in the real world of a prop firm, this is the book. But even more so, this book shows you how to focus on process instead profits to become a successful trader. There are a number of great trading lessons in this book, all wrapped around relatable stories (kinda like a blog I know). The writing is a bit rough, but then again it’s not meant to be Shakespeare.