Gone are the days when trading and investing were the protected territory of a handful of Ivy-League-brokers operating on Wall Street. In the fast-paced and information-packed 21st century trading and investing are accessible to anyone. Having said that, not everyone will be profitable from the process. Actually, not everyone will survive.
What does it take to be profitable in the investment business? What are the basics and how to reach elite levels? What drives trade psychology? All these questions and more are answered in this article!
Here are the 15 reads which any trader, be it a pro or just a novice, must read so that the profits will outweigh the losses. The profits being not only financial but also psychological. They have been written by some of the best traders in history, or depict some of the worst financial crashes.
Most importantly – the books are ranked by the traders themselves. This is an endeavor in which you can take part as well.
This is a how-to blueprint for an efficient day trader in grain futures. The first chapters of the book explain why the author has taken up day trading and why exactly has he chosen the grain futures market.
Then he moves on to explain the nitty-gritty of trading and what skills are needed for his specific method. Without any complex mathematical or statistical tools, the book provides an empirical system based on sound trading and money management axioms. The main goal of the day trader, for success on the grain futures market, is using limited information to identify the support and resistance levels, decide on the direction of the trend and determine the stop loss and take profit points. All this is explained in detail with many real-life practical examples, screenshots, and considerations.
The author provides us with a view of both the tactical daily trades and the strategic monthly perspective of applying his system. The last chapters detail what is needed for a profitable home day trader.
The book is great for understanding the existing opportunities in the grain futures market and gives also valuable practical advice for any equity, forex, future, and options traders.
This book is one of many books owned by professionals and successful day traders, vloggers, influencers, and lecturers on exactly this topic. Although some theory is provided, the book has a more practical hands-on approach.
The author is writing from his own experience and starts with why day traders lose. The reasons are that they either have not chosen the correct stocks, they are not managing their risk correctly, they have not chosen the correct entry point, they are not following a winning strategy or all of these combined. Then Ross establishes what he calls the foundations of daily trading. For him, these are tracking down volatility and prudent risk management. He then explains how to become good in these and turn day trading into a profitable endeavor. Ross also provides a few proven trading strategies which can benefit the reader. These strategies also provide an immediate starting point for trading. The book can also be supplemented with the author’s YouTube videos and online resources.
This is a good read for beginner intraday traders, which provides a well-organized glossary of “dos” and “don’ts”. Just keep in mind that you will need to build from here on up.
As we are discussing the fourth edition, obviously the book has something to say. Larry Kudlow from CNBC brands the book as a must-read for any investor and “a classic”. O’Neil bases his investment advice on a massive study of all market winners from 1880 to 2009.
Like all books on investment, the book discusses strategies to minimize risk and ways to maximize gains. However this book is a best-seller because it provides its own easy-to-follow, 7 steps investing system called “CAN SLIM”. The author provides tips for choosing the right stocks and shares ways for identifying winning stocks before the rest of the market. The book provides numerous charts and adjourning explanations on how to read them and facilitate the successful investor. O’Neil illustrates clearly how investment discipline can ascertain profitability both in rising and falling markets. He also provides all the tools necessary and insights on key decisions which any investor will have to make.
This book is packed with useful knowledge on investing in stocks and of course making profits in the process. It provides a useful system that can be applied immediately.
John Carter is one of the most successful traders (trading since 1996) and a published author. His book is on Amazon’s best-selling list. Although a tad bulky (500+ pages) and not an easy read, each page is packed with critical trader information.
This book is for those, who have built their foundations and who are still willing to go the way as traders. The third edition includes all the content, which made this book a best-seller, as well as additional new information on making the right trading decisions in the random market context. John Carter’s strategy combines detailed technical analysis with a comprehensive macro view of the markets. He is the one who considers trader psychology as an important market maker and something that successful traders need to master. The book also covers important areas like the premarket checklist, risk control tools, entry and exit point determination, methods for anticipating market corrections, and many other practical techniques.
Mastering the Trade will help traders read the markets and know what works in their favor and what is working against them. Shortly said the book will help them evolve to professional trading status
Propriety traders are professionals who trade with the capital of their company. Their livelihood, well-being, and mere employment are directly dependent on their ability to sustain profits from their trading. Mike Bellafiore is one such prop trader who is the founder of SMB Capital, which is regularly featured on CNBC, Bloomberg, CNN, and FOX Business. Mike is a lecturer and the teacher of some of the world’s best traders.
Soon after its release, the book was stamped as a “trading classic”.
In it, Mike shares the behind-the-scenes insights of what makes a consistently successful trader stand out from the crowd of average or failing ones. Here you will find the critical skills necessary, emphasis on the discipline and winning trading strategies. Mike emphasizes the learning curve of traders and the necessity for perpetual improvement. Learning from the evaluation of negative trade outcomes is also emphasized. The book also features many success and failure stories, which make it a breath-stopping read.
One Good Trade is a book that will help established traders grow their competence, tools, and techniques helping them improve and eventually reach the elite level of prop traders.
In this book, traders can learn from the best. This is the page-turning story of one of the greatest Wall Street stock speculators Jesse Livermore. “Greatest” does not mean a one-way street.
The readers can learn both from outstanding successes, but also from pitfalls in trading. This is the oldest book on our list. It was written back in 1923 but is still in print and a must-read for established and beginner traders alike. It is coined as the “most read trading book”, Alan Greenspan describes it as “investor wisdom” and Fortune states that it is “the smartest book” in existence.
Contrary to the other books on our list, this is a novel written with the support of journalist Eduin Lefevre. The book has three parts encompassing the happenings between the 1890s and 1920s. In the first part, Livermore is making easy profits on bid-ask spreads of inactive stocks. Later he moves to stock trading on the New York Stock Exchange where he repeatedly went under due to overleveraging. Finally, in the 1920s, Livermore engaged in stock manipulation, charging fees of 25%.
The book is compulsory for traders and well worth the read for anybody. Learning the story of the market will be both interesting and useful.
Here is a book by a clinical associate professor of psychiatry Brett N. Steenbarger. He is also a successful coach of hedge fund portfolio managers and author of several books
The book offers a different view of traders as entrepreneurs who must utilize in the same way as entrepreneurs do their personal and monetary assets. The author helps traders achieve a work-life balance by prioritizing both trading and goals. There are 101 short lessons on the various psychiatric topics which directly relate to the life of traders. Each lesson identifies a challenge for traders, their approach in facing this challenge, and suggestions for dealing with it. All lessons apply to trader psychology. Professor Steenbarger deals with dealing with weaknesses, building self-confidence, understanding, and dealing with stress and provides practical advice against fear and anxiety. He does not stop here but moves to establish the principles of well-being and flourishing of traders, boosting energy and achieving happiness
Like they say “it’s not all about money”. Professor Steenbarger helps traders achieve the balance by becoming their own psychiatrists. The book is suitable for experienced professionals and beginners alike in their effort to become their own coaches.
Ever wondered who taught and later employed Warren Buffet? This would be Benjamin Graham – economist, investor, and professor.
Benjamin Graham is known as “the father of value investing”. The book teaches investors how to evade errors and develop long-term investment strategies. The “Intelligent Investor” was written in 1949 and is one of the two ground-breaking investment works of Benjamin Graham. Since then it has grown to become the “stock market Bible”. Being not only a teacher but also a motivator, Benjamin Graham created much of the vocabulary of contemporary traders. He emphasized the importance of investor psychology, fundamental analysis, buy-and-hold investments, activist investments, the margin of safety for investments, and the concept of wild market fluctuations (all are relevant today).
The revised edition includes all original texts but also has a contemporary perspective added by journalist Jason Zweig. The Intelligent Investor provides the fundamentals of contemporary trading and investment. Probably the best attestation of the work is the success of one of the students of this book – Warren Buffet, who considers Benjamin Graham as the second most influential person in his life (second only to his father).
Jack Schwager spent the better part of the last 25 years in search of an answer to three important questions. What distinguishes the best of traders (the Market Wizards) from the flock? What are the critical skills they need to possess? How can we learn from their experience? During that time he interviewed all outstanding market practitioners and put to paper his findings in his “Wizards” series of books.
The Little Book of Market Wizards features the distilled answers to the above questions coming from about 50 interviews with distinguished traders. In each of the 23 chapters, the author describes important aspects of trading, the approach of the Wizards, and how the readers can profit from implementing the techniques of the best in class. The book describes how not to lose conviction in a down market, the perils of overtrading, the importance of finding the trading strategy that best suits you, how and why traders need to change directions, the importance of discipline and money management, and much more.
The book is an intriguing read which will help investors improve their skills by implementing the approaches and skills of the Wizards of the trade.
The second of the “Wizard” series of books by Jack Schwager is just as much a page-turning read as its best-selling predecessor. In it, he continues his in-depth interviews with the most successful traders.
The author asks the question which we all would love to ask the Wizards of trade. Schwager shows the people; the skills and the methods behind the stock market, currencies market, commodity futures, and computerized group trading. One will focus on fundamental factors and the corresponding market reaction. Another will follow the charts and calculate statistical probabilities. Although none will consider themselves as gamblers, Schwager distills that they all possess many qualities of expert poker players.
The interviews will cover all of the financial markets, show the methodologies used by the best. The Wizards will disclose their winning money-making strategies themselves. They will share not only their phenomenal wins but also their catastrophic losses, the reasons behind them, and the lessons learned. What Schager finds out is that irrespective of the financial market of operation and the many differences between traders what is common is meticulous research, courage, self-confidence, and strict planning
The book is just as intriguing and useful, as the first one as it expands the lessons learned from the best.
This is an updated, upgraded, and expanded edition of its best-selling predecessor. The book includes classical market wisdom enforced by modern trading tools
The book introduces the systematized and disciplined market approach. It propagates the need and the rules of diligent risk management as well as self-management. The book features stock picks, rating templates, trading plans, personal ratings for traders, to name a few of the many tools, knowledge, and market insights.
Besides the updated charts, the new book also has new chapters for ways to boost discipline and override hinders of success. It also features a chapter on asymmetrical market zones which carry less risk and greater returns. The book provides new tools for money management, profit-taking, and stopping loss. The sections on market indicators, trading systems, and trading vehicles are exceptionally detailed and useful. At the end of the book, Dr. Elder also suggests the need for good record-keeping which will become a valuable source of self-learning.
The book will be beneficial to experienced and novel traders alike, as it provides the tools necessary for building the personal trading system of each investor.
Mark Minervini is one of the Wall Street wizards featured in the interviews with market leaders by Jack Schwager for his book “The New Market Wizards” (see above). Minervini has a 25-year career with an average annual return of 220% and a compound return of 33.500%! What is intriguing is that this outstanding return was achieved while keeping risks low. How is this possible?
The system which Minervini uses to reduce risks and achieve his star profits is called SEPA. SEPA combines diligent risk management, ardent self-analysis, and determination. Minervini discloses his system in this book. He show us how to spot undervalued stocks, how to avoid common trading mistakes, how to mitigate risk, when to enter and when to leave the market and how to reach super performance in stock ins any market. The book also features a real-life example of Minervini’s trading and numerous case studies to best illustrate the advantages of SEPA.
Any trader, who wishes to improve and achieve stellar profits irrespective of the market, will love this book as it reveals in detail the proven system for outstanding performance by one of the Wizards.
Mark Douglas is regarded as the leader in trader tuition. This is his sequel to “The Disciplined Trader”. Both of his works are considered industry classics.
This is also one of the first books which introduce the concept of investor psychology and its input for a successful trader.
Technical and fundamental analysis will not be efficient if they are not backed by mental analysis. In his opinion “the thinking strategy” will always have a strong influence on any trader’s outcome. Douglas teaches how to overcome the mental habits which eventually will lead to losses. He discloses why traders will lack consistency and make a wrong stock pick. The author teaches us how to take responsibility for failures, how we can build confidence as traders, master uncertainty, and the necessary steps to make to achieve the mentality of a great trader. Douglas also opposes beliefs to truth and analyzes the influence beliefs will have on the markets. All of these are accompanied by easy-to-do, but effective exercises which will introduce traders to thinking in terms of probabilities while building a winning mindset.
The book is necessary for investors who wish to understand and master their psychology and use it to their advantage in trading.
Trend Following became an instant international best-seller upon publication. The revised fifth edition includes seven new interviews and additional research proof. The book discloses the Trend Following trading system. By following a set of simple rules, it enables traders to profit on rising, falling, and volatile markets.
Michael Covel examines the “Trend Following strategy”, the risks associated with it, the rewards, and the traders who use it. He collects and discloses evidence on how and why the system works. Here, you will find the stories of trend-following investors who have profited greatly from following the system. You will also learn from their mistakes. Readers will be able to fully grasp the trend-following philosophy and observe how it has handled various market volatilities – big events, panics, crashes, bubbles, and crashes. The book provides systematic insights into behavioral trading and decision-making. Michael Covel also shows how trend-following has performed over two centuries and introduces the reader to various trend-following models.
If you are a trader in search of a new winning trading philosophy, this book is for you.
This is the story of Long-Term Capital Management (LTCM) – the Greenwich, Connecticut-based hedge fund.
The fund was created and managed by John Meriweather – the former Solomon Brothers Vice-Chairman, joined by two Nobel award winners in economics. The stellar management team employed the absolute return trading strategy aiming to beat the market. And in the first three years, they return 21% in the first year, 43% in the second, and 41% in the third year. LTCM easily became the favorite of investors and banks alike. All of them eager to invest and lend to the winning team. The competition was envious of the fund's performance and soon started to mimic their behavior aiming at reaching their returns. Probably this is the turning point in the story. This is when Meriweather changed direction and boosted leverage to a boggling extent, and … well, the perfect storm hit. The 1997 Asian financial crisis was joined by the crisis in Latin America and capped with the Russian financial crisis of 1998. LTCM imploded and collapsed in just four months, leaving a credit hole of some USD 4.6 billion and the need for Fed recapitalization measures.
The book is a great read for anyone engaged in finance. If we know our past mistakes we will be stronger in the future.
Some, like Jack Schwager (see above), consider trading as being close to gambling. Others consider trading as a science, which incorporates rules and methods to be studied, learned, and followed. Then again some consider the financial markets a force of nature, while their counterparts suggest full behavioral cause and effect. Which one are you? Which do you consider closest to your concept of trading?
And this is just for starters - the philosophy behind trading. Then comes the trading strategies with their success or failures. Then comes the methods for understanding the markets, the trends, and the prediction of the future. Then come the practical advice and tools for making decisions, curbing risk, getting into and exiting a trade, money management, and profit-taking. Then comes the psychology behind it all with suggestions on avoiding stress, mastering emotions, fighting anxiety, overcoming losses.
All of the above is packed in our 15 book list. What is best is that this otherwise could-be-boring read is conveyed by the stories of countless traders – some outstandingly successful and some dangerously failing. Both ways the heroes of these stories are real-life (actually in most cases fiction cannot come close to similar creations) and have important insights to share.
Now you have the full list with all the stories, philosophies, insights, and tools. Dive in, if you have missed a title and want to Perfect Your Trading or register on our cutting edge platform.
Do not forget to up-vote your favorite read to rank your selection high and to help others know what is best.
A stockbroker for 15 years and a keen follower of stock markets and financial news. Mark Benson has extensive knowledge about the national and international financial market. He has written for many popular websites in the past.