*Market Wizards: Interviews with Top Traders by Jack D. Schwager
*The New Market Wizards: Conversations with America's Top Traders by Jack D. Schwager
*The Disciplined Trader: Developing Winning Attitudes by Mark Douglas
*Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas
*Reminiscences of a Stock Operator (Wiley Investment Classics) by Edwin Lefevre
*Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance) by John J. Murphy
Just be in mind that books will not trade for you.
For instance, the Schwager book on Technical Analysis... it's a joke (especially compared to Brooks). A bunch of vague suggestions.
As for Lefevre (Livermore)... great book, but every loser reads it and quotes from it. Great for some trading principles, but nothing specific for new traders that would help them to learn to think about price action.
Larry Williams... now there's a SUPERMAN. Stellar performance in trading contests. At least until they found out he had huge losses in his other account (what he was likely doing is hedging one system against another, and then promoting the one that made large profits).
So yah, junk.
"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
Here is a short list of books I've read and recommend. I am not a big reader of books in print, I tend to prefer on-line methods... but nonetheless, these are great reads and contain a lot of information that helped me.
I would add to the choir about Al Brooks. Consider it a 101 course in price action trading and required reading if you imagine a school curriculum in learning to trade. However getting to Al's level trading exactly the way he describes is another story only a few claim to reach. If you want to see how Al trades live, consider joining his live webinar for day or two during a last week of a month. It's pro-rated so you'd only have to pay $5 per # of days to the end of the month.
I'm not so sure about books about Livermore. Do they really describe how he traded? He lost most of his 2 billion (today's dollars) fortune by the time of his demise.
The following user says Thank You to Cloudy for this post:
I've never understood why people give advice if they don't make money themselves. It's pretty pointless to read Brooks if one is going to trade off charts. If one chooses to trade off charts, then it's much better to read charts than b(r)ooks. The false truths of others may lead to ruin...
The only books one needs to read are textbooks on market mechanics, financial theory and statistical methods. Figuring out how to make money is a problem solving exercise that is best left to one's own intellect.
Anyone who doesn't enjoy reading Livemore is not suited for speculation!
I fully subscribe to this statement. There is a whole lot of so-called experts spreading their wisdom and selling a lot of advice, including - just naming the good ones
-> Gerald Appel
-> Linda Bradford-Raschke
-> Jake Bernstein
-> Al Brooks
-> Constance Brown
-> John Carter
-> Michael Covel
-> Tom DeMark
-> Dr. Alexander Elder
-> Daryl Guppy
-> Robert C.Miner
-> John Person
-> Larry Pesavento
-> Van K. Tharp
-> Oliver Velez
-> Larry Williams
-> Tom Williams
I have read their books, all of it is relatively easy to digest, gets you acquainted with the language of technical analysis and sounds reasonable.
If something sounds reasonable, it will likely not work ...
Unfortunately, anything that sound reasonable in trading does not work. If a trade feels good, the probability is high that it will become a loser. A trader walks through a forest of Fata Morganas, and the only thing that can save you is either
-> 10,000 hours in front of your trading screen guided by a mentor(you are now a heuristic trader and your brain may have adapted to the task, such as a violin player has retrained a huge area in his brain for moving his fingers)
-> or alternatively a rule-based system with a proven edge
Did I say proven? To prove the edge, you need to be able to evaluate it with statistical methods. To apply the edge, you need tools and - in case that your are not letting run your system automatically - the mindset of a trader.
Focus on Market Mechanisms, Statistics and Psychology
I would not focus on the easy-to-read trading books listed above - you can always use them as a distraction or a motivational read , but look for a thorough knowledge on
-> market mechanisms (start with Barry Johnson: Algorithmic Trading and DMA)
-> statistics (yes, you should work through an undergraduate statistics course)
-> basics about futures (try Schwager on Futures, then John C. Hull on Options, Futures and Other Derivatives)
-> trading psychology (start with one of the books by Brett Steenbarger, such as the Daily Trading Coach or Enhancing Trader Performance)
-> intermarket relationships (John Murphy is an easy read)
You could also subscribe to some of the trading magazines, such as Technical Analysis of Stocks and Commodities or Active Trader.
I am reading them, although at least half of the stuff is just the latest fad and is only printed to lure more people into the trading machine that feeds the professionals.
Yes, motivation is as important as anything else. Here are some more fun reads:
-> Rob Booker: Adventures of a Currency Trader
-> Nicolas Darvas: How I made $ 2,000,000 in the stock market
-> Satyajit Das: Traders, Guns and Money
-> William Falloon: Charlie D.
-> Roger Lowenstein: When Genius failed
-> Charles Mackay: Extraordinary Popular Delusions
-> Sebastian Mallaby: More Money than God
-> Jack Schwager: Market Wizards, New Market Wizards
-> Martin Schwartz : Pit Bull
-> Jillian Tett: Fool's Gold
Just to know what happened to others, who wanted to be traders.
The following 9 users say Thank You to Fat Tails for this post:
Al Brooks has the gift of laborious, long-winded and circumstantial explanations, ever repeating himself. This is what makes his books difficult to read, it is not the content. His way of trading is pretty straight, he uses one or two indicators and looks for ever the same profitable patterns for determining the trend and finding an entry location.
I like his books and they are not complex in despite of his personal ways. Just compare them to "Paul Wilmott: Introduces Quantitative Finance" or "Ralph Vince: The Mathematics of Money Management" or "Stephen Taylor: Asset Price Dynamics, Volatility and Prediction". That is complicated to read and more of a headache.
Reading Al Brooks is more like reading a comic. It is full of charts.
The following 2 users say Thank You to Fat Tails for this post:
I thoroughly enjoyed your response FatTails but would add one book that learning traders might benefit from on their path.
There are others but this one is suited to the learner who has perhaps spent some time studying the charts and being informed and misinformed by the internet.
John is (or was?) the main guy at Futures Truth and in my experience of him was knowledgeable, humble and helpful. The book runs over a range of different discretionary approaches to reading the markets and, in the second half, has a very pragmatic look at the core methods for systems trading. Its got enough detail suggest ideas for the currently confused without pretending to a holy grail.
Its been around long enough that you'll probably find it in your library or on the net. Then you may well like it enough to buy a copy anyway.
If you can't get the clues from this book then spend more time looking in the markets for them. Then compare what you found with the book. An iterative cycle should do it. I wish it was the only book on trading technique I'd bothered reading ... I still come back to it from time to time.
just want to recommend a free ebook on the mental aspect of trading that I liked. can be read online or downloaded apparently: just go to ValhallaFutures.com - Free eBook for Traders[/url]
Fat Tails seems to have misunderstood my earlier post. Many vendors on the web. Some good. Many not so. I've gotten freebies from Elliott Wave Int'l, Dynamic Traders, tradethemarkets, Advanced Trading Workshop, Puretick and a few others. I consider this all as part of the free education available on the web. and most of these same sites offer courses that are expensive, none of which I've ever bought. We're big boys here, and are capable of reading the price tags. Let's stay positive. I found that site again, and it's definitely a freebie, despite the other products. I stand by my recommendation that the free ebook called Self Recognition is a good read for the mental game of trading, and many of the other freebies I've found on these other pay-for-product sites were good too.
The following user says Thank You to bsheers for this post:
Thank you for putting this clear. I am always suspicious, if it reads "download free e-book", you download that e-book and then you find out that the first 300 pages of the book are missing and that you are invited to pay $ 2,995 for getting them as well. It does not look like a good deal.
It feels like somebody who is not making money with trading tries to steal your money instead.
That said, the few available pages are worth reading.
