Let's face it:
I'm no trading genius, but I know this one crucial thing—if I aspire to be a successful trader, I must follow in the footsteps of those who've already achieved success.
And the most effective way to do just that is by diving into the wealth of knowledge in the finest trading books.
Now, you might be wondering:
"With so many books on trading out there, which should I read?"
Fret not, for I've got you covered. Having devoured over 200 trading books, I've distilled my top recommendations. These selections offer invaluable insights and lessons for traders at all stages of their journey.
You've got:
1. The Best Trading Books for Interviews and Biographies
2. The Best Trading Books for Stocks
3. The Best Trading Books for Trend Following
4. The Best Technical Analysis Books
5. The Best Trading Books for Day Trading
6. The Best Forex Trading Books
7. The Best Trading Books for Systems Trading
If you're looking for war stories and inspiration from successful traders, these trading books are what you need.
This gem of a book is a collection of interviews with some of the most successful traders in the business. It's a perennial recommendation in the trading world, and for good reason. The pages unfold stories of traders who turned $30,000 into a staggering $80 million, a hedge fund manager who boasts an average annual return of 30% over twenty-one years, and the T-bond futures trader who transformed $25,000 into a jaw-dropping $2 billion!
The interviews feature legendary traders, including the likes of Paul Tudor Jones, Ed Seykota, and Richard Dennis, to name a few.
Honestly, I can think of nothing that's a downside here.
I wholeheartedly recommend this book to anyone with an interest in trading. It undoubtedly ranks among the best trading books out there.
However, if you're new to trading, prepare for a learning curve. This book assumes a basic understanding of technical terms, so beginners might find it challenging.
This book serves as a follow-up to the earlier "Market Wizards" and follows a similar format. The key distinction is that this volume zeroes in on American traders, while its predecessor featured traders from across the globe. Nevertheless, the value it imparts remains priceless.
As mentioned earlier.
Reiterating, there's little to dislike.
"The New Market Wizards" is a must-read for anyone passionate about trading, building on the rich tradition established by its forerunner. If you found the first book compelling, this one is bound to deliver an equally enriching experience.
See above.
This book is an absolute delight to read. It chronicles the tumultuous journey of Martin Schwartz, a trader who initially ventured into fundamental analysis with limited success. However, his pivot to technical analysis marked the turning point, propelling him to earn a staggering $1.8 million within his first two years of trading. He later cemented his status as a champion trader, renowned for his unshakeable nerves and a killer instinct that bestowed the well-deserved moniker "Pit Bull."
This book is undoubtedly among the best in the trading world, featuring an extraordinary trader.
An entertaining and enjoyable read, it promises trading insights and moments of humor and amusement.
Frankly, there's very little to fault.
This book should be on your radar for an engaging trading narrative. It's an easy and enjoyable read, delivering trading anecdotes and entertainment. However, your quest involves acquiring specific trading strategies and techniques. This book may not entirely meet your needs, as it leans more toward biography than a how-to guide.
If you were to ask a successful trader to recommend just one book, chances are "Reminiscences of a Stock Operator" would be a recurring answer. The reason? It's simply that good.
This biography offers an intimate glimpse into the life of Jesse Livermore, arguably the most renowned trader in history. It charts his journey through the speculative realms of financial markets. Livermore began trading at a young age, and as you delve into this captivating narrative, you'll witness the evolution of his trading style.
The real allure of this book lies in its capacity to entertain. You'll accompany Jesse Livermore as he amasses and loses fortunes, even facing bankruptcy multiple times.
The icing on the cake? Upon re-reading this book, you'll uncover new insights that eluded you in previous readings. Furthermore, the book explains buyers' and sellers' strengths and weaknesses, rendering it a valuable resource for those seeking to master price action trading.
The experiences of Jesse Livermore resonate with many traders. It's a narrative most traders can relate to, and the timeless trading lessons it imparts hold relevance for the vast majority.
Admittedly, it may be challenging for newcomers to the trading world. Some technical terms could be difficult to grasp, especially in the initial stages.
This book is a must-read for a captivating trading story infused with trading wisdom. However, if your quest involves gaining specific trading strategies and techniques, remember that this book leans more toward biography than a how-to guide.
If you're a trader who wants to find the next monster stock, then you must check out these stock trading books.
William J. O'Neil, a stock trading luminary, boasts an impressive 5000% return over 25 years. His trading strategy, the CANSLIM method, combines technical and fundamental analysis, and this book provides a comprehensive guide to his approach.
The CANSLIM system is remarkably accessible, even for those with limited experience in fundamental analysis.
Reading the book may lead you towards a soft sell to subscribe to the Investor's Business Daily service. Additionally, the charts featured are relatively small and might pose challenges for readers.
If you're keen to acquire knowledge on trading stocks through a blend of technical and fundamental analysis, this book offers substantial value. However, if your trading activities do not revolve around stocks, this book might not be as beneficial since the fundamental components are distinct.
Mark Minervini, a distinguished stock Market Wizard, and the U.S. Investing Champion, unveils his time-tested trading system that led him to secure triple-digit returns for five consecutive years, averaging a remarkable 220% annually for an astounding 33,500% compounded total return.
He employs a trading approach akin to the CANSLIM system, seamlessly merging technical and fundamental analysis. This book condenses the various types of trading knowledge – such as price action, fundamental analysis, and risk management – into a single comprehensive resource, saving both your time and money.
Mark Minervini presents a straightforward approach, elucidating what he seeks when trading stocks.
While the book is impressive, it could benefit from more trading examples.
If you aspire to master the art of stock trading through a harmonious blend of technical and fundamental analysis, this book is an invaluable resource. Nonetheless, if your trading activities do not revolve around stocks, the fundamental aspects may vary, making this book less pertinent.
This book, authored by Andreas Clenow, delves into the mechanics of a systematic momentum trading strategy that can lead to higher returns and reduced risk. Clenow provides a step-by-step guide to his strategy, offering an in-depth exploration of its intricacies.
Andreas Clenow employs statistical evidence and thoroughly backtested results to support his claims, a practice that's quite rare in the trading industry.
The content may appear overwhelming for those with little prior knowledge of statistics.
This book is invaluable if you're a trader aiming to gain profound insights into systematic stock trading. However, if your trading activities are not focused on stocks, the book's content may not be pertinent to you.
Trend Following is one of my trading methodologies because it's a strategy that can scale even if you have a $100 million-dollar trading account.
To learn more, these Trend Following books are a must-read…
I'm partial because I penned this trading guide.
The concept behind it is to elucidate the essence of Trend Following in a way that won't baffle you with intricate trading terms.
Moreover, I've incorporated a straightforward trend-following strategy that allows you to reap gains in rising and falling markets.
This was my introduction to Trend Following, and it set me on the right path. It breaks down the core principles of Trend Following and how hedge funds leverage this strategy to amass substantial wealth.
The book establishes the foundation of Trend Following, supported by concrete evidence from the genuine accomplishments of these hedge funds.
It doesn't provide a precise strategy to kickstart your journey, which may require you to explore further sources and books.
This book is a perfect starting point for traders eager to embark on their Trend Following journey. However, it may not align with your preferences if you're more inclined toward day trading or swing trading.
It is a remarkable tale of how an assorted group of individuals is plucked to participate in a unique trading program. They undergo an intensive two-week crash course on trading and are left to navigate the markets independently.
They amassed millions. This book delves into the narrative of their journey, strategies, and trading approach.
This book is a captivating and straightforward read. It comprehensively explores the Trend Following methodology, encompassing vital aspects like risk management, entry and exit tactics, and more.
I couldn't identify any aspects I disliked.
This book is a fantastic choice for traders venturing into Trend Following. However, leaning more towards day trading or swing trading might not align with your preferences.
Andreas Clenow's debut book reveals how a straightforward trading strategy, Trend Following, can consistently outperform a buy-and-hold approach. He provides comprehensive insights into his trading strategy and the corresponding backtested results.
Andreas Clenow relies on statistical evidence and backtesting to substantiate his claims and guides you through the specific trades the strategy would have executed. He takes an in-depth look at the psychological facets of trading year-by-year.
I can't think of anything that I didn't like about this book.
This book is an excellent choice for traders looking into Trend Following. However, if your trading style aligns more with day or swing trading, it may not fit you best.
Here's the deal:
Hundreds of Technical Analysis books are out there, and most are not worth the paper they're printed on.
So, if you want to focus on the stuff that matters, start with these Technical Analysis books…
In this book, "The Ultimate Guide to Price Action Trading," you will find the essential principles of Price Action Trading that work without getting lost in unnecessary technical indicators, chart patterns, or candlestick patterns. These fundamental concepts are designed to help you become a consistently profitable trader.
This book is structured like a textbook, thoroughly covering essential technical analysis topics such as chart patterns and candlesticks. By reading this book, you'll develop the skills to interpret charts and identify patterns effectively.
I appreciate this book's clear and concise approach to technical analysis, which sets it apart from many other complex technical analysis books.
However, it's important to remember that while technical analysis is valuable, it isn't the sole requirement for successful trading. This book is best suited for beginners who are just starting their trading journey and need a fundamental understanding of technical analysis.
This book takes a fresh approach to traditional technical analysis by adding a statistical perspective. This book is a valuable resource, thanks to Adam Grimes, who has meticulously conducted the research for you. He has rigorously backtested various chart patterns, providing insights into which ones offer a competitive edge in the markets and which don't.
This book is a fantastic fusion of top-price action guides and system trading books.
The in-depth analysis of what works and what doesn't in technical analysis.
I can't think of any drawbacks to this book.
This is a must-read for all traders except those specializing in order flow scalping.
Stan Weinstein wrote this book in 1988, and its cover design is a testament to its vintage. However, don't underestimate the value of this relatively unknown book. It's a treasure trove of practical trading knowledge that can be applied to any market or timeframe you're trading. Some of the concepts shared in this book are so timeless that I still use them today.
It's a straightforward book that imparts practical trading concepts and techniques. Additionally, each chapter concludes with a quiz to test your understanding.
I can't think of any shortcomings in this book. Nevertheless, it's worth noting that the examples primarily feature stocks that have become defunct, as it was written quite some time ago.
This book is a must-read for all traders except those specializing in order flow scalping.
Unlike the higher timeframes, day trading is fast-paced and requires you to make quick decisions.
As a day trader, you'll use tools and techniques different from other timeframe traders.
I'm talking about market profile, order flow, depth of market, etc.
If you want to learn more, check out these books…
This book, authored by Mike Bellafiore, one of the co-founders of a proprietary trading firm located in the heart of New York City, delves into the essential components of successful trading. Bellafiore addresses why some traders thrive while others encounter setbacks and how to pinpoint the "right" stocks for trading.
Moreover, the book equips you with valuable insights into deciphering order flow, allowing you to harness this knowledge to your advantage in trading.
What I find appealing about this book is its engaging narrative that provides a rare glimpse into the typically hushed world of proprietary trading.
Conversely, I would have appreciated some practical examples demonstrating the process of identifying stocks in play.
This book is tailor-made for individuals who are traders, with a special emphasis on proprietary traders seeking to enhance their trading prowess.
If you're new to the concept of price action trading, this book is your gateway to a whole new world. Authored by Bob Volman, an independent forex trader with extensive experience, it focuses exclusively on price action trading and offers profound insights into Volman's trading mindset.
What captivates me about this book is Volman's unique perspective on price action trading, setting it apart from the commonly echoed strategies in the trading world. His in-depth exploration sheds light on aspects I had never considered before.
On the downside, the book can be lengthy, often requiring multiple paragraph readings to grasp the intended message.
This book is a valuable resource for anyone engaging in chart-based trading. Its techniques and concepts universally apply to diverse markets and timeframes, making it a recommended read for chart-dependent traders.
This book is a comprehensive resource for those seeking to master the art of trading with Market Profile. If you're unfamiliar with the concept, Market Profile is a distinct approach to chart interpretation that considers the element of time.
What distinguishes Market Profile is its ability to provide insights into the nature of the trading day – whether it will be characterized as a range day, a trend day, a high volatility day, and more. With this information, traders can strategically plan their daily trading activities.
This book is particularly commendable in its in-depth coverage of Market Profile, a subject matter not commonly explored in trading literature.
However, one drawback is the absence of practical examples demonstrating how traders can effectively apply this knowledge to profit in the financial markets.
This book is primarily tailored for futures day traders. If you fall into this category, it's a highly relevant resource. However, this book may not align with your trading needs if futures trading is not your focus.
The Forex market is a different beast from Stocks.
You can go long/short, trade 24/5, and start as little as a few hundred dollars.
So, if you want to get started in Forex trading, read these Forex trading books…
If you're eager to unravel the intricate relationship between fundamental data and their impact on the dynamic currency markets, this book is your go-to guide. Inside, you'll discover the crucial news releases that demand your attention and, more importantly, why they matter.
Furthermore, this resource doesn't stop at fundamentals alone; it offers a selection of technical trading strategies designed to empower you in Forex trading.
One standout feature of this book is its ability to demystify fundamental analysis in an approachable, step-by-step fashion accessible to even the layman.
However, it's worth noting that while the book introduces technical trading strategies, there's a lack of concrete logic or statistical evidence to substantiate their effectiveness.
This book is tailor-made for Forex traders relying on fundamental analysis within their trading strategies. If you're part of this group, its insights resonate with your trading style and preferences.
This book is a comprehensive exploration of the inner workings of the Forex market. It delves into the various participants in the Forex market and uncovers their motivations for trading. Additionally, it highlights the challenges that retail traders like yourself face and offers specific trading strategies to help you level the playing field.
What sets this book apart is its candid, no-nonsense approach to unveiling the realities of how the Forex market truly operates. It provides practical trading strategies and explains the underlying principles that make them effective.
However, it's important to note that while the book offers a range of trading strategies, some may no longer apply in the current trading environment.
This book is ideally suited for Forex traders looking to gain a deeper understanding of the market and acquire valuable insights into leveling the playing field. If you're actively involved in Forex trading, this resource is a valuable addition to your trading library.
Systems trading is an excellent approach to navigating the markets, characterized by predefined rules that eliminate the need for second-guessing. However, the challenge lies in locating trading systems that have demonstrated their effectiveness through proven backtest results.
If you're on the hunt for such systems trading resources, here are some books you might want to explore:
(Note: It's worth mentioning that I've previously covered "Following the Trend" and "Stocks on the Move" in earlier discussions, so I haven't included them in this list.)
These books can be invaluable for traders seeking well-defined trading systems with documented backtest results to help guide their market endeavors.
"Unholy Grail" stands out in the world of trading literature because it offers something rare: not just one, but a collection of seven stock trading systems that have proven their ability to outperform the markets. These systems are particularly compelling because they have each undergone rigorous backtesting over a decade, spanning various market conditions, including the tumultuous 2008 financial crisis.
What's most commendable about this book is its commitment to providing straightforward trading systems that are accessible to anyone, enabling them to achieve success in the markets.
Remarkably, there are no notable drawbacks to mention about this book. It's a testament to the strength of its content.
However, it's worth noting that all seven trading systems are rooted in the same fundamental concept, centered around momentum and trend-following. Some readers might find it advantageous if the book explored a broader range of trading methods.
This book caters to systems traders active in the stock markets. If you're part of this category, it presents an invaluable resource that equips you with well-tested systems to enhance your trading strategies.
This Systems Trading book is dedicated to trading Exchange Traded Funds (ETFs). It delivers precise trading rules for each system, accompanied by the essential backtested results that traders seek for confidence in their strategies.
A notable highlight of this book is its popularization of the 2-period RSI (Relative Strength Index). It equips readers with the knowledge and techniques needed to harness the RSI indicator effectively in timing market pullbacks.
One potential area for improvement in the book could be the inclusion of month-to-month performance data for each trading system, which would provide a clearer view of their performance trends.
This book is tailored for systems traders trading stocks or ETFs. If you fall into this category, the book offers valuable insights and strategies to enhance your trading in these markets.
This book takes a deep dive into Mean Reversion trading, offering diverse techniques to approach this strategy. Including code for each trading system, specifically designed for Amibroker, sets it apart, enabling readers to conduct their backtesting.
While the book's content is undoubtedly valuable, it's essential to note that it may not be the most beginner-friendly resource. A foundational understanding of programming and statistics can be immensely beneficial for comprehending and applying the material effectively.
In terms of its target audience, this book is primarily tailored for systematic Mean Reversion traders who are well-versed in trading methodologies. If you belong to this category, the book equips you with various techniques and practical coding examples to enhance your Mean Reversion trading strategies.
This is a good place to start your trading journey: TradingwithRayner Academy.
I took years to compile this list of best trading books and want to add more over time.
So, here's what I want to know…
Do you have other trading books in mind I should add to the list?
Leave a comment below and let me know.
