Sunday, 14 April, 2013

Top Trading Books Every Serious Trader Should Have

There are so many trading books out there. Lots of them are not worthy of your time and money. Here is my list of ten best trading books that will help new traders to shorten their learning curves and achieve their trading goals, no matter which market they are trading, be it futures, stocks, or forex currencies, no matter what trading styles they apply, be it trend trading, swing trading, or day trading. These books are helpful to professional traders as well.

1. Reminiscences of a Stock Operator by Edwin Lefevre
There is no doubt that this book is on top of my list. The reading is both entertaining and informative. Lefevre surely has the talent to capture the mind of a great trader – Jesse Livermore and the market as well. Reminiscences is the best trading book recommended by most top traders in the world. It’s also the most quoted trading book. My favorite quote is “there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.

2. Market Wizards: Interviews with Top Traders by Jack D. Schwager
A fantastic book allows a peek into the mind of the world’s most successful traders. Million dollar traders, even billion dollar traders were interviewed in this book. Richard Dennis, the father of turtle traders, was reportedly made $200 million in about ten years started with a shoe string. Paul Tudor Jones is worth $2.8 billion, and was ranked by Forbes in 2009 as the 224th richest person in the world. Bruce Kovner is worth $3.5 billion, and was ranked by Forbes in 2009 as the 164th richest person in the world.
3. The New Market Wizards: Conversations with America's Top Traders by Jack D. Schwager
Another market wizard book by Schwager.
4. Pit Bull: Lessons from Wall Street's Champion Day Trader by Martin Schwartz
Pit Bull was written by market wizard Martin Schwartz. In this book, Schwartz shared his journey from a dead-end financial analyst to Wall Street’s champion day trader. Schwartz won the U.S. Trading Championship in 1984. Schwartz is also a Champion Horse owner. It’s obvious that Schwartz has a champion heart. One particular useful tool I learned from this book is to use 10-day EMA as barometer to gauge the daily market behavior. A must read for serious day trader.
5. The Taylor Trading Technique by George D. Taylor
This book was recommended by the only female market wizard Linda Bradford Raschke, who admitted built most of her short-term trading strategies based on the technique introduced in the book. The reading is proved very challenging, but the reward is well worth the time. Taylor divided trading days into three categories – buying day, selling day, and short sale day. Taylor trading technique captures the essence of swing trading. A must read for serious swing trader.
6. Japanese Candlestick Charting Techniques, Second Edition by Steve Nison
Nison is the first person introduced Japanese candlestick charting to the western trading community. Candlestick charting offers unique information about market price action, especially at the turning point. This is the best book on candlesticks so far. Readers will learn lots of useful candlestick patterns and how to combine candlesticks with other common technical analysis tools.
7. Technical Analysis of the Financial Markets by John J. Murphy
This is the only book you ever need to study technical analysis. Murphy did a wonderful job to drive home various technical analysis topics in a straightforward and understandable manner.
8. Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitudeby Mark Douglas
Most novice traders have spent lots of time and energy to search Holy Grail in the trading. They tried all kinds of indicators and trading systems, and overlooked themselves are the most important factor of successful trading. This is a perfect book for learning trading psychology.
9. Zen in the Art of Archery by Eugen Herrigel
This book was recommended by an anonymous market wizard. At first, it might be bizarre to associate trading with Zen and archery. Archery is only one media to express the Zen experience. Actually when you are trading in the zone, you are experiencing Zen in the art of speculation, the highest form of trading psychology.
10. The Art of War by Sun Tzu
The Art of War is the oldest book about military strategies and tactics in the history. It was written by Sun Tzu more than 2,500 years ago, during the Spring and Autumn period. There are 13 chapters to discuss every aspect of fighting a war. Although trading in the market shares much similarity with fighting in the battlefield, it is by no means more difficult than the warfare, the cruelest form of performance art. My favorite quote is “Every battle is won or lost before it is ever fought.
If you haven’t read above books, please do yourself a favor and study them. It might be the best trading decision you have ever made.