There is a wealth of information out there at the moment on trading. While there are most certainly challenges involved in trading (even at low levels), some current books on day trading and other aspects (including spread betting), give you all the information you need to make a great start and more.
We’ve chosen the very best of the best trading books.
#9 Market Wizards
Written by Jack D Schwager, Market Wizards was released in 1989. Within the pages of this highly-respected piece of work, Schwager interviews a number of people who have made millions off the trading markets. And each interview offers real gold for anyone who wants to learn.
If anything, the interviews don’t discuss any kind of ‘magic’.
The names involved in the project are familiar to anyone who has an interest in financial markets success. So you have Paul Tudor Jones, Tom Baldwin and Bruce Kovner, to name just three. The answer to trading superstardom involves hard work, obviously, but also a positive and focused attitude.
Combine these two, the book tells us, and you’ll make it.
#8 Trade Your Way to Financial Freedom
Van Tharp has built a huge career out of making the markets simple and accessible. His most famous work is this one though, and it dates from 2006. It has a reputation for timeless, practical advice. Van Tharp’s biggest ‘idea’ is that we all make trading too complicated, and that a simple approach is best.
He’s famous for creating a mindset and trading system that he calls ‘Tharp Think’. The bottom line is that we get in our own way when we trade, and that massive success is only possible if we develop the right psychological approach.
Position trading is comprehensively covered in this book.
And if there is anyone who knows position trading, it’s Tharp. Dive in, and we think you’ll soon see the book as a ‘basic text’ for anyone who needs to learn all there is to know about trading, even in the short term.
#7 The Intelligent Investor
Benjamin Graham is arguably the father of modern investing strategy, and if you wanted to have further proof of that, you only have to hear Warren Buffett’s opinion of the book The Intelligent Investor.
Buffett is one of the most widely-respected investment experts the Wall Street world has right at this moment in time. He’s focused on making intelligent choices, and he called The Intelligent Investor ‘the best book about investing ever written’. So that’s the highest praise you could possibly imagine, basically.
Was he right?
We think so.
If you’re looking to invest and you’re stuck at the stage where you’re struggling to find the right pick from the stock market, you need to read this book. In it, Graham clearly explains the difference between investment and speculation. In other words, he defined the positions that would bring returns as being investments, and all other positions (lacking in prior research and consideration), as speculation.
This key distinction is why Buffett was so impressed.
Modern investing, especially with trading being so technology-rich, needs even more intelligence to cut out the noise. This book will help you be more intelligent. And to cap it all, it was first published in 1949.
#6 Mastering the Trade
John Carter is an experienced trader.
He now spends a lot of his time advising other traders on radio shows and at special conferences. He’s often booked in to speak at the big conferences on day-trading and finance in general. Mastering the Trade is the reason why he’s so highly-respected, and it’s one of the best investing books we know.
In this trading book, Carter narrows the characteristics of the very best traders down to just five in his guide to day trading. The book still divides opinion in some parts of the trader cultural landscape, but we believe you won’t find a better and sharper book on the psychology behind trading. It’s well worth a read, and it has recently been released in a new, updated edition too. This is one of the best trading books around, hands down.
#5 The Disciplined Trader
While Carter’s work may cover all the bases when it comes to trading strategies, Mark Douglas adds some finer points that illustrate how much day trading and trading in general is often like the game of poker. And just like poker, most of the winning moments come about due to rigorous self-discipline and patience.
Mastering the trading ego may not seem like the most important thing in the world when you’re faced with some quick choices in day trading, but if you follow Douglas’ advice in this trading book, you should find that you are more in control, and more able to manage the ups and downs of the life of a trader.
There is a lack of discipline, Douglas suggests, in most trading lives.
For example, one of the best suggestions he makes is to only focus on the process of trading, rather than the profits and losses. The more you distance yourself from everything but the trade itself, the better you are at reaping long-term rewards. This objectivity (delivered in a calm, measured way) makes this one of the very best day trading books.
#4 How to Day Trade for a Living
Unlike Mark Douglas, Andrew Aziz firmly believes that day trading is as far removed from poker as possible. There is nothing to be left to chance in trading from his point of view, and once you grasp that simple concept, his theory makes sense. The theory itself is all about studying relentlessly, and knowing the market as fully as possible.
However, rather than present as dauting and onerous, the approach outlined here is delivered as a simple, step-by-step and actionable package. There’s nothing here that the beginner can’t pick up and run with. It’s for this reason that we think the book is one of the very best titles on day trading around.
Aziz makes it clear that day trading is risky if you don’t know what you’re doing. It’s a fun read, and it brings you a confident and educated look at making real money.
#3 Come Into My Trading Room
One of the best trading strategy books, this is for the intermediate or more experienced trader.
In other words, it’s for the kind of trader that has made money and wants to look at the finer points that will allow them to ‘next-level’ their work. It isn’t completely beyond a beginner, but you’re looking at a book that covers a lot of ground very quickly, with plenty of technical analysis, and doesn’t offer any light relief. It’s all about making trading a way of life.
To that end, the writer (Dr. Alexander Elder) makes it clear that there is a certain methodology to creating a business-like approach to trading in the long term. Essentially, he’s outlining a way to make your own personal hedge fund. Risks and problems are explained in the finest detail, and this is where the complete beginner may be lost.
For those who have got their feet wet though, this will give you the tools you need to become a very successful trader, rather than someone who rides a wave of speculation and luck.
#2 Day Trade Online
If you’re really not interested in scalping, you can stop reading now. Perhaps the best definition of day trading at its core, scalping is not for the faint-hearted. It requires an almost constant eye on the numbers, and superb timing.
Christopher Farrell knows that scalping is risky, and hard work.
He also knows how to do it well.
While his book isn’t entirely about this ‘rock and roll’ side of day trading, it does feature it heavily. It wins us over because it does it in a calm, measured way. It’s so well-written that even the absolute beginner can pick this up and get an overview quickly.
#1 One Up On Wall Street
We’ve saved what is quite probably the best example of someone ‘putting their money where their mouth is’ for last. One up on Wall Street is a great piece of written work, and it has behind it the story of a man who came from nowhere to become one of the most celebrated traders ever.
It’s simply one of the very best trading books to learn from.
Peter Lynch is generally seen as the most successful money manager in the world. But he started out with almost nothing.
His story seems almost ridiculous.
In college, he bought 100 shares of a small airline for $8 a share. That stock the increased hugely. Each share went from $8 to $80, and the rest is history. A bit of luck came into it. The legend is that Lync is working as a caddy for the president of Fidelity. Lynch was taken on by Fidelity (apparently because of his golf connection to the president) as manager of the famous Magellan Fund.
Then things really began to improve for Lynch.
As manager of the Magellan, he took it from $18 million in value to a staggering $14 billion.
This book explains a lot.
It doesn’t give the reader anything other than an understanding that investing is not about being lucky or jumping on any bandwagons. He encourages readers to find stocks that are on the cusp of greatness. He calls these ‘ten baggers’. The idea is that, just as with his airline stock all those years ago, the right picks increase ten-fold in value. In that regard, it’s arguably the best beginner’s guide to trading available.
While you may not find the secret to being rich with these trading books, you will find some invaluable advice that can help you negotiate the often risky world of day trading.
Get stuck in, understand the risks, and learn from the real pros.