Reading List

There are books I highly suggest that every trader read.  This list is just a starting point.  Find a style that you find useful and follow through.  Just as you can't get enough experience watching the tape or the charts, you can't read enough if you want to excel as a trader.  Learn from the best and apply their lessons to your own trading style. Only after reading these classics should you even think of reading books on more focused topics such as options and futures.

Japanese Candlestick Charting Techniques, Second Edition [Hardcover]
Beyond Candlesticks: New Japanese Charting Techniques Revealed (Wiley Finance) [Hardcover]
Author: Steve Nison
Steve Nison brought candlestick techniques to the attention of US traders back when charts were difficult to come by and they consisted solely of squiggly lines and ugly bars. Nowadays, charts are ubiquitous and candlesticks are a click away on trading programs. Personally, I couldn't imagine trading without using them. They may not be the panacea we all want, but they help to show what is going on at a glance. You need to understand candlesticks if for no other reason that so many traders use them and explain their thinking in terms of "inside days" and "hanging men" and "hammers." I keep these books out and refer to them. They are handy references. The more you understand candlestick analysis, the easier you trading life will be.

Reminiscences of a Stock Operator (Wiley Investment Classics) [Paperback] Author: Edwin Lefèvre
"Edwin Lefèvre" was the pen name of Jesse Livermore, widely regarded as the first modern trader. He gained fame as a short seller during the 1929 Crash, but played both sides of the trade. I quote his aphorisms all the time, and the more I trade, the more I understand and appreciate just exactly what he was saying. The lessons are timeless and useful on a daily basis.

The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 [Mass Market Paperback]
Authors: Gordon Thomas and Max Morgan-Witts
Perhaps the best social history of the 1929 Crash. Did you know that the actions of a crooked English financier was one of the principal causes of the Great Depression? That virtually the entire staff of a bank embezzled client funds to make shady investments? Sound at all similar to present day events? Well, they should. Not only a great history full of references to Jesse Livermore and his trading principles, but an entertaining read as well.

Trader Vic: Methods of a Wall Street Master [Paperback]
Author: Victor Sperandeo
This was one of the first trading books I ever bought. I used to read it on the subway on the way to work. It is divided into two sections, one dealing with the technical aspects of trading, the other with the psychological. When I began trading, I devoured the technical section and thought the psychological part was just the author dealing with his own hangups. Now, I view the technical section as fairly generic but the psychological stuff as the truly memorable part. Either way, this is a terrific introduction to trading.

Market Wizards: Interviews with Top Traders [Hardcover]
The Stock Market Wizards: Interviews with America's Top Stock Traders (published in 2001)
Author: Jack D. Schwager
There is a lot to learn from these books. For example, the story of Sir John Templeton is fascinating. He left the military after World War II and took an interest in stocks. Contrary to his assumptions, he noticed that the best stocks to buy were those hitting new highs. Following that simple observation, he became one of the biggest tycoons in the world.

Beating the Street [Paperback]
Authors: Peter Lynch and John Rothchild
It is useful to learn the successful trading techniques of others whether you decide to follow them or not. Lynch was the wildly successful manager of Fidelity's Magellan Fund back in the days when it towered over the industry. Those days are long gone, of course, and Lynch retired over twenty years ago. However, he gives illustrations of how he came up with winning investments by simply going to the mall. Well worth reading.

How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition [Paperback] Author: William J. O'Neil
Another stock market leader with his own unique system. He boils his trading philosophy down to the acronym CANSLIM. Read the book to find out what that means. Useful if for no other reason than to give insight into practitioners of fundamental analysis. I actually have the first edition (revised), but I'm sure the later editions are just as educational.

Beating the Dow (Revised and Updated) [Paperback]
Michael B. O'Higgins with John Downes
This is a great introduction to a simple strategy for profiting in the stock market, and it almost always works! I saw somebody using it online recently. It ties into a larger theme that active management of accounts is highly suspect, whereas passive strategies such as buying index funds often work well. Very helpful in understanding the different strategies traders use to make money in the stock market.

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