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Trading Books

Last updated 6/28/2012 7:58 PM EST (GMT -5) 0 Comments - Add your comment

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I am frequently asked to list my favorite trading books.  I have read too many trading books to count, but there are certain ones that stand out.  You may notice that none of these books focus on a specific trading strategy.  If I had to describe the books on this list as a group, I would say they are good insights into how traders think.  They are all widely available and you should have no problem finding any of them.

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1. Reminiscences of a Stock Operator - Edwin Lefevre

This book seems to be at the top of every traders list.  First published in 1922, its lessons are as relevant today as they were 90 years ago.  It is a fictionalized biography of Jesse Livermore, and it tells a story that features the many ups and downs in his life.  If you have never read a trading book, this is where I would start.  I have read my copy so many times that it is literally falling apart on my desk, and I will probably have to buy the Kindle version.

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2. The Market Wizards Series - Jack Schwager

There are four books in this series, and all of them are incredible.  Market Wizards, The New Market Wizards, Stock Market Wizards, and Hedge Fund Market Wizards are all worth buying.  Each of these books contains a series of interviews with some of the greatest traders of all time.  The most amazing aspect of these books is that Schwager was able to convince these guys to open up during an interview for a book.  There are countless lessons that can be learned in this series.  More importantly, you get insight into the way the best traders think.  They use many different strategies, and the subjects have many different theories.  After the first few interviews in the original book, any aspiring trader will be hooked until they finish the whole series.

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3. Trading in the Zone - Mark Douglas

This is the definitive guide on trading psychology.  No other explanation needed.

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4. Liar's Poker and The Big Short - Michael Lewis

Liar's Poker isn't so much a trading book, but it offers some great insights into Wall Street and the the era that idolized Gordon Gekko.  And it is just really entertaining.  The Big Short does a great job of explaining the recent financial crisis.  If you can't explain what a CDO is, buy this book.

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5. When Genius Failed - Roger Lowenstein

This book details the rise and downfall of Long-Term Capital Management.  Aside from being a good story, it provides one of the greatest cautionary tales regarding the use of too much leverage.  It also teaches you to be humble, and that anyone can experience failure in trading if they fail to properly manage their risk.  Like many of the other books on this list, it won't give you a holy grail style strategy at all.  However, it will instill lessons that will hopefully come through in your own trading.

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6. Pit Bull - Martin Schwartz

Marty Schwartz is an interesting guy, and this is his "biography".  One of the most interesting parts of this book is that Schwartz was successful, but he wasn't Paul Tudor Jones successful.  I think that contrast make the book very compelling.  I wouldn't put this at the "classic" level like some of these others, but that is why it is put at #6.

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7. Wall Street - Oliver Stone

Alright, so this is a movie.  But nothing is better at pumping you back up after having a bad day in the markets.  Even the last part that was supposed to be evil is pretty exciting.  Gordon Gekko was supposed to be a villain, but instead he inspired countless undergrads that "greed, for the lack of a better word, is good".  

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About The Author

Bradley Gareiss has been a technical analyst with GFT since 2008. Brad is known for his ability to identify high probability trading opportunities through geometric pattern recognition. He also focuses on trading psychology and risk management, and has written many extensive articles on these subjects.