The Book Shelf

Trading consists of an endless learning curve that forces us to constantly remain nimble and adapt. As part of this, there are numerous perspectives and ideas that show their faces at one point or another, whether technical, fundamental or psychological, that are vital to having in our knowledge base.

The list below is in no way complete but have offered myself and a lot of other traders guidance throughout our careers. I like to read a good number of books each year and while ideas come and ideas go, the material presented on this list seem to come into light more often than others.

If you have any other ideas in terms of addons to this list please send them to me at your leisure.

The Alchemy of Finance
by George Soros
It’s a classic, without question, but probably still my favorite. In this trading “diary”, Soros outlines all of his decision making processes in managing his portfolio. I like the way this book is set up; It’s essentially a chronological outline of his entire management process, and a comprehensive look into his macroeconomic theories and what “really” drives the markets. Must read.

Trading in the Zone
by Mark Douglas
Very popular but for a good reason. This book has just good solid content covering the psychological aspects to trading. This is Mark Douglas’ second but most popular book, and delves into many different aspects which affect the trader’s thinking patterns day in and day out. I and many others have reread this book over and over again. It’s a must have.

The Disciplined Trader
by Mark Douglas
Mark Douglas’ first book, but also a good read. I have to say that after reading Trading in the Zone first though you can see the infant writers experience level come through in this one. Not as popular as trading in the zone but still very much worth going through. Quite a few different concepts in this one that are overlooked by the popularity of Douglass’ second book.

Market Wizards: Interviews With Top Traders
by Jack D. Schwager
My first impression of this book was phenomenal, and it no doubt lived up to my expectations. This is the first of two books written by Schwager, showcasing interviews with some of the world's leading traders/hedge fund managers, all of whom are at the top of their game. Some of the traders interviewed include hedge fund icons Bruce Kovner, Michael Marcus, Richard Dennis and Paul Tudor Jones, just to name a few. They trade everything from currencies to equities, and outline much of their growth as traders and common techniques. Its easy to read and provides great insight to the way these guys think. 'Must read' in my opinion.

The New Market Wizards: Conversations with America's Top Traders
by Jack D. Schwager
If you're going to read the first, you mine as well do the second. Just as valuable as the first, though a bit less awe-inspiring given the names of the people interviewed, its just as insightful. In this version, Schwager breaks down the book into sections, based on the most commonly traded instruments (currencies, equities, commodities, etc) by the fund managers. Like the first, its a quick read, and if you ever wondered what goes through the brain of a multi-billion dollar portfolio manager, here's where to start finding out.

Pring on Price Patterns : The Definitive Guide to Price Pattern Analysis and Interpretation
by Martin Pring
People are always asking me for a good recommendation for a book about price action. This is a good one to start off with. For those of you that don't know him, Martin Pring coined the term 'pin bar', among others. The book dedicated to the subject of price movement, without much clutter of indicators.

Technical Analysis Explained: The Successful Investor's Guide to Spotting Investment Trends and Turning Points
by Martin Pring
Another Pring book and well worth the read, especially for the beginner. Pring is very well known/respected for his techniques and ways of teaching price movement and valuations of current market conditions.

New Market Timing Techniques: Innovative Studies in Market Rhythm & Price Exhaustion
by Tom DeMark
One of my first introductions to technical analysis was Tom DeMark. Tom is a technician that has branded many of his methods; they are unconventional, they are thorough, and they work. Many of his indicators have been made for Bloomberg, though it is possible to use many of these techniques from scratch as many are based on pure price action. I will still refer to many of these, though my main and primary method is what is discussed here on this site. This is his second book, and in my opinion, the best out of the three which he has written.

The Art of Contrary Thinking
by Humphrey Bancroft Neill
A classic collection of essays written to explore the anti-groupthink mentality, it's probably one of the best of its kind. The essays themselves are relatively quick reads and offer a lot of valuable insights and wisdom that applies to all generations. It evaluates the measurement of the crowd mentality which can be broken down on a personal scale, as well - why you oftentimes make the same mistakes, and eye opening ways to scale against them. And PS - I notice this book can be hit or miss with a lot of people; I tend to think a more open mind is needed for this one.

How to Make Money in Stocks: A Winning System in Good Times or Bad
by John O'Neill
This has always been one of my favorite books on stock picking. It’s easy, it makes sense, and it has made me good money. I spent a few bucks on this book many years ago and I still look through it today. It’s by Bill Williams, who is the founder of Investor’s Business Daily, and it covers his basic, common sense methods for selecting equity investments. I have read so many complicated textboooks and other materials in terms of portfolio structure and selecting stocks, but I always end up going back to using some form of William's methods. They work. I'm also a regular subscriber to IBD. The IBD 100 and IBD eTables are what I look at the most. You can find them at investors.com.

New Trading Systems and Methods
by Perry Kaufman
I bought this book in an attempt to help me out with optimization of certain techniques I was using, and found it to be virtually an encyclopedia of information related to trading. This book covers a tremendous amount of material for just the basic daytrader or the automated system builder. It's very technical, but if you can handle it, it's definitely worth having on the shelf. For tradestation users, it comes with an accompanying CD that contains a ton of formulas for indicators and systems described in the book.

Options, Futures and Other Derivatives
by John Hull
One of the best overviews these markets I have found. I actually had this as required reading in college, but never sold the book and still take it out from time to time. It’s a very good reference source covering these markets, and covers everything from basic mechanics/popular trading strategies to valuation.

The Encyclopedia of Chart Patterns
by Thomas N. Bulkowski
This book covers all your basic, and some advanced price patterns that everyone should have a handle of. If not this book, I would still recommend reading up on them and just having them known in your trading toolbox. But this is the most comprehensive and best book I have found in regards to price patterns.

Prechter's Perspective
by Robert Prechter
Even if you're not a fan or follower of Elliot Wave Theory, Pretcher seems to drive the nail in on a lot of concepts. In the book, he discusses some of the most fundamental tenets to trading both on a personal and macro level. Although it covers quite a few bases it's concise and well-organized in terms of the ideas discussed. I was originally hesitant about buying this one but once I started reading it I couldn't put it down.

Basic Economics - A Common Sense Guide to the Economy
by Thomas Sowell
This is a best seller, but overall a good primer and overview of, you guessed it, basic economics. It’s a relatively easy read and covers time and risk, the international economy, industry and commerce, price and markets, etc. If you’re not much of an economist but need to understand more of how money is flowing around the globe then this is a very good place to get started.

Trade Your Way to Financial Freedom
by Van K. Tharp
The title of this book is misleading, and I'm not sure if it helped or hurt its sales because it sounds a bit too much like an infomercial, but the content is there. The author, Van Tharp, is a well-respected technician/trading coach that is regularly hired by leading banks and funds to coach traders of all experience levels. He also has a website, http://www.iitm.com/ where you can subscribe to his free newsletter. I get it and its usually filled with some pretty good material. Newer traders are likely to find this book exciting, more experienced traders might not as much, but regardless its still very much worth breezing through.

The Market Guys Five Points for Trading Success: Identify, Pinpoint, Strike, Protect and Act!
by AJ Monte and Rick Swope
This is a newer one, but for anybody that likes a common sense approach to trading, these guys outline 5 points to success, with further breakdowns into common pitfalls versus appropriate trading behavior. I breezed through it; it’s a pretty easy read with just plain good content and very much worth having around.

High Probability Trading
by Marcel Link
Let me say that this is the only book on the list I haven't read beginning to end, though I've heard more than enough recommendations to put it on the list, so here it is. If anyone has more experience with it I'm open ears, but in general it gets very (very, very) good reviews and after seeing the basic content this guy seems to hit it on the mark.

The Tax Guide for Traders
by Robert A. Green
This is for people in the US. I have this one on my shelf and it always gets used at one point or another. It’s a good reference source written by a CPA based here in New York, and it covers all markets. I have yet to find another tax guide geared specifically to traders that is this easy to use and thorough.