Whether a trader is a seasoned professional or just starting their career, they can turn to books written by experts who know the market to advance their trading knowledge. The books included in this list are stalwarts of the industry, having been resources for some of the most successful traders. They cover a wide range of topics, including technical analysis, trading psychology, futures and Forex trading, meaning any trader can find something they can learn from.
Over his professional trading career, Jeff Cooper has developed dozens of proprietary strategies that help traders profit in any market. In “Hit and Run Trading,” Cooper explains how traders can use these strategies – which have helped trading pros like CNBC’s Jim Cramer — to succeed in both day and swing trades. This books is the foundation of a storied 30+ year career, and includes dozens of secrets for gaming institutions, playing gaps, and finding the best momentum names.
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William J. O’Neil published the most recent edition of “How to Make Money in Stocks” after the 2008 market crash. He believes that proper market timing, trading, and interpretation of charts can have a massive impact on your profitability. Choosing the most profitable stocks and knowing when to buy and sell is crucial to making profits, and this book instructs traders on those principles. O’Neil has developed a powerful system — called CANSLIM — to minimize risk and maximize profits, even teaching traders how to earn more in a bearish market.
While Douglas’ book includes technical information about choosing markets to trade and determining entry triggers, most of the book focuses on how to overcome psychological barriers that prevent traders from succeeding. Douglas takes a closer look at the patterns within the market that lead to negative behaviors and mentalities for traders, proposing strategies that help traders understand the risk they are taking on and how to be more comfortable with the market. This book is a favorite of T3 Live's Sami Abusaad.
Unlike other books on trading, ‘Reminiscences of a Stock Trader’ is a fictional story, although it’s based on the real life of famous trader Jesse Livermore. The book follows the career of Larry Livingston as he progresses from a quotation-board boy to an experienced trader. Readers can learn from the mistakes that Larry makes and watch him improve his own techniques.
Schwager turned to legendary traders to provide advice for “The Market Wizards” series of books. He interviewed some of the most successful traders in the business to describe their experiences with trading psychology, strategy development, and profit maximization. The lessons in this book can apply to traders at any level, whether they are just starting out as interns or have been trading for years. There practically isn't a trader alive that hasn't devoured the Market Wizards series of books.
Most people believe that accomplished professionals have an advantage over average traders because they have more experience or work for major financial companies. But mutual fund manager Peter Lynch thinks the average investor actually has a leg up on Wall Street pros. He believes traders can use simple, everyday observations to gain an edge, and explains exactly how to do so.
In 1983, two professional traders, Richard Dennis and William Eckhardt, set up an experiment to determine whether or not traders were born with a special gift or if they could be taught how to trade successfully. Dennis believed he could train a group of people to be traders, just like turtles were raised on farms in Indonesia, so the group members were called “turtles.” The most successful of the group, Curtis Faith, wrote “The Way of the Turtle” to give further insight into the experiment, including everything the turtles were taught and the results they experienced from the lessons.
Benjamin Graham is often considered to be the “father of value investing” or the “dean of Wall Street” because his ideas have been foundational to so many investors; one of his students was Warren Buffett, famous investor and one of the richest people in the world. Graham wanted to teach traders how to manage risk, increase profits and remain disciplined. “The Intelligent Investor” is key to developing smart investment strategies.
In order to be successful, traders must understand technical analysis so they can predict market moves and know when to buy or sell. John J. Murphy’s “Technical Analysis of the Financial Markets” takes a deep dive into understanding market trends, chart patterns, intermarket relationships and trading tactics, among other things. It includes the basics of analytical methods, making the book a great resource for beginning traders or for anyone looking to advance their technical analysis skills.
All traders want to make profits and have winning trades, but trading is just as much about reducing or avoiding losses. Van Tharp’s book focuses on helping traders manage their risk and reduce their losing trades so they can profit as much as possible. “Trade Your Way to Financial Freedom” also includes information on trading psychology, which can put traders in the mindset they need to get over their personal biases about the market and bounce back from losses. Tharp’s techniques can be applied to a variety of trading styles, including futures and Forex trading.