20 Timeless Books Every Trader Should Read
20 Timeless Books Every Trader Should Read
I’m regularly asked, “What books do you recommend for traders?”
To which I reply, “What are books?”
In a digital world, where almost any type of information is just a click or tap away, the idea of reading a book to learn about or improve your trading might seem pointless, and it is unless you’re reading the right books.
Those which make up the canon of timeless trading wisdom and advice, the type that is as relevant today and tomorrow as it was yesterday.
So how do you know which books those are?
Well, you’re in luck, because I’ve spent the last 30 years – and a ton of money – buying and reading every trading and investing book out there so you don’t have to.
This list represents the best of those books, the ones I can, with no reservations, 100% recommend – except for the last two which I suggest you avoid.
As with every list, there will be disagreements.
“Why is that book on the list?”
“Why isn’t that book on the list?”
Because it’s my list, so shut up!
But seriously, I’ve picked books that I feel any trader can benefit from, and that means they don’t just have to be about trading. Some of the books listed here relate to the trader mindset.
I hope you find this list valuable, and if you do, please pass it on to someone who will appreciate it.
Technical Analysis Using Multiple Timeframes – Brian Shannon is an OG trader/blogger and his book is a reference companion that I go back to time and time again.
The way he illustrates the power and simplicity of using multiple time frames in a trading methodology will make you shake your head and wonder why you’ve been making things so complicated.
A must-have addition to any comprehensive trader’s library.
Trading Options: Using Technical Analysis to Design Winning Trades – Greg Harmon is a friend and a good guy, but that doesn’t mean I’d put his book on this list if it didn’t deserve it – and I can’t say enough good things about this book.
Don’t let the “options” part of the title fool you. This is a book that teaches you step by step how to identify trade candidates and create a methodical plan to take advantage of them – both with and without options.
If I could only recommend one book on trading, this would be the one.
The Next Apple: How to Own The Best Performing Stocks In Any Given Year – From the book’s description;
This is not a book about the company or the stock Apple. This is a book about finding the next Apple or at least finding hundreds of “mini-Apples.”
$10,000 invested in Apple in 2003 is worth $1,500,000 today.
Ivan is a great trader and master at finding hot momentum stocks. He does a great job in this book showing you how you can find stocks that have the ability to become the next Apple, aka, big winners.
Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere – Tadas Viskanta has spent the last 15 years on a daily quest to find the most interesting, compelling, and informative financial and stock market content. This has made him an expert curator of investment ideas and strategies, the best of which he lays out in this book.
From active trading to ETFs and global investing, Tadas covers it all in a smart, thoughtful way, with a smooth style that is both easy and enjoyable to read.
The Market Wizards Series
Chances are, you’ll 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 (Market Wizards, The New Market Wizards, Stock Market Wizards, and Hedge Fund Wizards).
And just recently, author Jack Schwager has added to this cannon with Unknown Market Wizards: The best trades you’ve never heard of.
The first of these books was written in 1993 so ignore the market-specific analysis, unless you have a time machine.
Their contemporary value is in showing how even the greatest traders initially struggled and often blew up (repeatedly) - before learning to adapt and become wildly successful.
Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets – 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: A Winning System in Good Times and Bad – 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 – Tough call on this book, only because I don’t think it is the Rosetta Stone of trading books that it is often described as.
The language is dated and colloquial, which though strange, is actually part of its charm. However, there are definitely some foundational lessons for trading in this book - you just have to make the historical conversion in your head from venues like “bucket shops” to the stock market.
How I Made $2,000,000 in the Stock Market – 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, smartphone 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 markets, is still a foundation of a solid trading style/discipline.
The Stock Twits Edge: 40 Actionable Trade Set-Ups from Real Market Pros
This is the book I wish existed when I started trading 35 years ago.
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: A Complete Solution to Mastering Technical Analysis and Trading Psychology– 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.
And I would have been wrong.
I was amazed at the scope of material that this book was able to cover in such 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 this is an instant classic for the beginning/intermediate trader.
Japanese Candlestick Charting Techniques – There are a lot of books out these on candlestick charting, but almost all of them are derivative of Nisson’s tome. This book does a great job explaining the basic concepts as well as the most relevant patterns related to candlestick charting.
Unless you really need to know about the “three-drunk-salarymen-in-the-Shinjuku-train-station” pattern, this book is all you will ever need for candlesticks.
Trade Your Way to Financial Freedom – 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.
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 this book worthwhile.
The Disciplined Trader & Trading In The Zone – 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 in your office to take notes on your trading deficiencies.
Pit Bull: Lessons from Wall Street’s Champion Day Trader – 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.
One Good Trade: Inside the Highly Competitive World of Proprietary Trading – 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 this blog).
The 50 Best (and Worst) Business Deals of All Time – This book is like eating a piece of candy – you will enjoy it so much and will be sad when done.
Clocking in at under 200 pages, it gives concise, informative, and fascinating insights into some well-known, and some not so well-known business successes and failures.
The chapter about the ABA’s settlement with the “Spirits of St. Louis” alone is worth the price of admission.
Backstage Wall Street: An Insider’s Guide to Knowing Who to Trust, Who to Run From, and How to Maximize Your Investments – if you’re familiar with Josh’s blog, you know he’s the real deal.
This book pulls no punches and will probably be looked back upon years from now as the clarion call against the entrenched Wall Street establishment instead of those Occupy Wall Street idiots.
Mean Business: How I Save Bad Companies and Make Good Companies Great – Dunlap made his name as a “turn-around” specialist for near-death companies, and this book chronicles some of his most famous successes.
I get that Dunlap’s career ended in shareholder actions, SEC investigations, and his banning from ever running a public company again, but just because Michael Jackson’s final few albums sucked doesn’t mean that “Off the Wall” and “Thriller” weren’t masterpieces.
Dunlap was an asshole to be sure, but oftentimes an asshole is what is needed, and his excesses in restructuring were a response to the bloated corporate excesses of the times.
It’s hard to fool guys like Kerry Packer, Sir James Goldsmith, and the principles at KKR who used Dunlap as their secret weapon, so “Chainsaw” Al must have been doing something right at some point.
The New Financial Capitalists: KKR and the Creation of Corporate Value – Love them or hate them, KKR changed the way M&A was done and left an imprint on corporate financing that is still felt today.
It is hard to forget in the wake of the 2008 credit crisis that KKR was always responsible – and almost always successful – in using debt and leverage to save failing companies and create or unlock value for shareholders and their investors.
This is an authorized biography of the company but done in a truly objective fashion and it highlights how the key to a successful KKR deal is not so much about the money (or debt) they brought to the table, but the wealth of managerial talent they brought to their target companies.
These are books to avoid.
Trading For A Living: Psychology, Trading Tactics, Money Management – This is the gateway book that every new trader seems to come through on the road to trading, but I have to say, I have never been a fan of Dr. Elder.
It stems from my suspicion that he makes (and has always made) more money from writing about trading and putting on overpriced seminars about trading than he has from actually trading. In this book, he espouses a multiple time frame method that is rudimentary at best and his nod to trading psychology is done better and in more depth by Douglas.
The only interesting aspect of this book is his explanation of how trading is NOT a zero-sum game, but that is really only worthy of a blog post at most.
The Education of a Speculator – I have a friend who not only is a 100x better trader than I could ever hope to be, but is a connoisseur of art and literature, and even surfs. He is also a friend of the author, Victor Niederhoffer, and thinks highly of him.
That is why it pains me to say that “Education…” is probably one of the worst written books that I have ever read. It would be better titled, “Let Me Tell You What A Great Squash Player I Am.”
And even though I am sure there was meant to be some subtext in his narcissistic stories that relate to trading, it is written in such a purposefully exclusionary way that you can’t find it. Since I am part of the “chattering classes” it is probably just that. Unless you are picking this book up on the way to your Nobel Prize luncheon, it’s probably best to just skip it.
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P.S. It should go without saying - but I’ll say it anyway - all opinions expressed in The Lund Loop are my own personal opinions and don’t reflect the views of my employer, any associated entities, or other organizations I’m associated with.
Nothing written, expressed, or implied here should be looked at as investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own diligence.
