I often get asked which books I would recommend for trading. If I had to make a list, I would not have to think hard as to which ones would be at the top of my list. The books listed below are what I consider to be some of the books that really helped me in my trading and it will help you as well.
They are not listed in order of importance, they are all important in their own way. Some are suitable for beginner traders and some for advanced or experienced traders.
1. Mastering The Trade (by John Carter)
This is the book that inspired me to take trading very seriously. In a way I was very lucky, because had I not come across Carter’s book early in my trading career, I may have well ended up blowing my trading account within months.
John Carter lucidly explains the psychological and tactical challenges that face a trader. What makes this book unique and enjoyable are three things: firstly that it contains several chapters on different high probability trading strategies; secondly that each chapter gives numerous real examples of how the strategy actually works and; thirdly and most importantly, precise entry and exit rules for each strategy including how to protect yourself against risk if you are wrong.
It is not necessary for traders to employ every strategy documented in this book. I personally have adopted one of them and it has since become part of my daily trading routine (more on that in upcoming posts).
What I really love about this book is Carter’s passion for trading. I admire the way he religiously carries out each trade in accordance to his rules and not based on impulse or whim.
This book is not for the beginner. Although, the advice given in the chapters on psychology and risk is absolutely crucial for everyone.
There is also a chapter on trading platforms. I personally use ETX Capital for all my trading and charts and would recommend them to all traders as they are very reliable, safe and user-friendly.
2. Market Wizards & The New Market Wizards (by Jack. D. Schwager)
These two books are a gem whether you are a beginner or an advanced trader. Each chapter is an interview with one of the world’s top traders. It is very easy to read – even a 12 years old could make sense of it.
The personal stories and insights of each individual trader is simply fascinating to read. I won’t spoil any surprises here. One of my favourites from the book is Linda Raschke, one of the few female professional traders out there. Her comment that while we can be good at predicting the direction of a move (up or down), but not so good at predicting the magnitude of the move (how far a market will move), is a very significant one which has helped me a lot in my own trading.
What I found interesting about this book when I first read it was how some of the world’s best traders have experienced losses in their own trading on a scale that is unimaginable. Readers will also notice that different traders will often disagree on a number of issues.
The major downside with this book is that whilst the traders give very valuable insights to their style of trading, no actual specifics are given as to exactly how they trade. Also, the interviews pre-date the technological age of the internet and widely available charting and trading softwares. Having said that, this book is a must for everyone who wants to learn how real traders think.
3. Volatile Markets Made Easy (by Guy Cohen)
This book is an ideal starter for anyone who wants to grapple with the intricate but lucrative world of options and volatile markets. One reason I am recommending this book above all the other books on options, is that its author, Guy Cohen, is an expert not just in options but very adept at being able to explain how to trade options to the ordinary person.
The first few chapters cover the basics of technical analysis and breakout patterns. Where it gets really interesting (for me) is when he talks about “straddles”. This is a strategy whereby you can potentially make money no matter which direction the market moves, up or down.
Guy Cohen does not seek to confuse the reader and he does an excellent job of clarifying what can be quite a complex topic. I definitely recommend it.
4. Technical Analysis of the Financial Markets (by John J. Murphy)
This book is the definitive guide to the world of technical analysis (analysis of charts). Fans of fundamental analysis (or “fundamentalist” as we like to call them) will probably scoff at the mere mention of technicals and charts, dismissing it as reading “tea leaves” and not serious trading. Don’t pay any attention. I don’t know of any serious professional trader who does not use some form of technical analysis.
John Murphy does a seriously good job of demonstrating how to analyse charts for the beginner traders. Trendlines, patterns, moving averages are all covered here.
5. Trading In The Zone (by Mark Douglas)
If you haven’t started trading yet and you want to save yourself months of anguish and frustration, then do yourself a favour and read this book.
Trading in the Zone is not a book about “strategies” or “systems”. It is about something much more important. Any trader will tell you that 95% of trading is psychology. It is not the trading system that is important, as much as how your own mind will work against you when you do trade.
The most important concepts discussed in this book are: consistency and uncertainty. You need to be consistent in your trading method and you need to have an unshakeable belief in uncertainty – that in the markets anything can happen. Once you accept that, you can give up on the emotions that imprison your mind and learn to be a better trader.
I have known many traders who have come to me and said to me how their entire perspective on trading has changed and that their trading performance has improved after reading this book.
Conclusion
The above is a selection of some of the best books on trading the markets. It is not meant to be an exhaustive list but it will definitely set you on the right path.
Perhaps these books have already helped you or you have your own suggestion – or maybe you disagreed with my choices. Let me know what you think and post me your comment below.
Looks good. will move to the top for my reading list.
Cheers Abdul!
And from Dr. Alexander Elder, “Trading for a Living”… for me one of the essentials too !
And when can we buy yours one ? 😉
Hey Ted. Yes good choice on Elder. I like his stuff too. As for my one, I’ll let you know. Cheers.
If you don’t read Logical Trader by Mark Fisher you are doing yourself a huge disservice.
Thanks a lot, Alessio!
Trading in the Zone should be number one. It also occurred to me that you were addressing those unfamiliar with trading psychology when you said you dream of a recession and that as traders we don’t really care what direction the market takes. Our thinking is counterintuitive to those who fail to comprende the probabilistic nature of markets and trading. You also failed to mention that unlike the big wall street banks we independent traders take on all the risk ourselves. Discussing trading psychology might take some heat off you for coments only a trader would understand.
Hi Alessio, thanks a lot for the recommendations, that was exactly I’ve looking for. I was about to order the “Inteligent Investor” from Amazon, since it had the most recommendations, but I will go for one of these… Do you know that one btw? Cheers!
Hey Alessio! I always enjoy you blogs & vlogs… Keep it up. Thanks a lot..
Alessio. I’m not a trader, but I admire someone who can write succinctly and to the point. You can.
Hey thanks so much!
“Her comment that while we can be good at predicting the direction of a move (up or down), but not so good at predicting the magnitude of the move (how far a market will move), is a very significant one ”
Its wrong…With EWT/RTEA method you can predict the direction and the magnitude (approximately level).
I have practiced this metod for 11 years and know it is possible.
se my website and “11 years of EWT “
A book that I’ve been using recently is Introduction to Technical Analysis by Martin Pring. It is great for an absolute beginner to use. I back it up with Stockcharts.com for more in depth info.
Thank you for that. More books to inhale in the upcoming months! I really enjoyed reading a book by Jesse Livermore as well (tho’ I couldn’t follow his “system”). If you ever want to explain it, you’d have a rapt audience. Cheers!
Great Alessio, thanks for the list 😉
Can you share your thoughts on the EU given a week to fix its Crisis on the last G20?
Cheers
Thanks for the list. It’s a source of inspiration. I’am a “now and then” Trader with a general full-time job from Germany. But I know, I need more basics. I have bought a book about candlesticks. And then follow books from your list.
Hi!
I would add to this list Nison’s books about Japanese candlesticks. Candlesticks will help to find turning points as well as signals of trend continuation.
In my opinion, one should start with An introduction to High Frequency Finance because nowadays most traders base their decisions by observing tick by tick data.
The book is quite technical but I think it is essential for those who are interested in understanding financial markets.
Mastering the trade is top of my personal list, John’s a great guy and great trader.
You can’t discount any of the old books (Pre 1980) by the likes of W.D. Gann, Elliott Wave Principle, Jesse Livermore and Richard Wyckoff – They all have their unique points.
Would be traders also need to understand that this is a profession not a hobby, and lot’s of study and learning are involved.
What do you think of “Way of the Turtle”.
All top notch books in the reading list. Another I would say should be included for traders looking for price action trading is Day Trading With Short Term Price Patterns by Toby Crabel.
awesome, will pop down the bookshop in canary wharf and pick em all up today !
Great post thank you Alessio for this helpful list! I am currently reading through ‘Trading for a Living’ by Dr Alexander Elder, incredibly useful insights into Trading Psychology!
Thanks for the list! 😀
>All top notch books in the reading list. Another I would say should be included for traders looking for price action trading is Day Trading With Short Term Price Patterns by Toby Crabel.<
A right up-to-date and unique book on price action, just released this month is:
"Trading Price Action Trends: Technical Analysis of Price Charts Bar by Bar for the Serious Trader" by Al Brooks. The first of three in-depth books on price action.
Quite special and complex (for the serious trader as it notes). Al Brooks has another book on topic but so difficult to read. Read the Amazon reviews to see what this means. I am waiting on Amazon to deliver my copy.
Thanks Richard for the book recommendation on Al Brooks – sure, it sounds great. I will look into this.
Thanks Christian.
Great selection of books. The Schwager books on great traders are very interesting espcially on Ed Sekoyda.
Hello Alessio,
I been following your blog and its really helpful. Just want to know that i don’t have the knowledge of technical analysis which books are recommended by you for learning technical analysis other than above or is it that above list is OK to start with.Thanks in advance.
Hi Amar. I would start with the ones I have recommended. Apart from those, you can try The Psychology of Trading by Brett Steenbarger, Trade Your Way to Financial Freedom by Van Tharp, and William O’Neill’s book on How To Make Money in stocks. All the best.
Hello Alessio,
I will give a try to the first one.
I will give you my list:
1) Japanese candelstick by Steve Nison : the bible of candlestick
2) Pitbull : Martin Schartz (full life of a trader epich!)
3) Principles of proffessional speculation: Victor Sperandeo => this is where I learned how to draw a trend line (please don’t laugh because I saw many who don’t know how to draw they try to gather multiple points, cut the wicks instead of drawing from the lowest low to the highest low for an uptrend). Many examples.
4) STREET SMARTS : LAurence Connors & Linda B Raschke. Many patterns BUT I found hard to find kind of setups except the TURTLE SOUP + 1 day which is a true swing technic.
5) Connors Vix REVERSAL: Laurence Connors : VERY GOOD BUT INEFFICIENT withe the current US market which is MANIPULATED BY FED AND FRIENDS (Goldman SACHS). The mouvement of the SPX is fairy tale. BAD FONDAMENTALS but they keep hiding it by making rallies by buying futures which trigger the cash flash trading. POSSIBLE WITH LOW VOLUME ONLY THE crowd will be caught! Institutionals are outside the market. THE MANIPULATION IS SO SCREAMING! Only the FOREX is independant. So the book pattern based on vix cannnot be trade.
This is where I took my main strategy like (close to SMA34 swing pattern shown in the last webinar) you with Carter’s one.
Many examples,COMPLETE and usable, A must!
AND THE LAST READY TO READ:
HOW TO BEAT GOLDMAN SACHS ON THE MARKET BY ALESSIO RASTANI
Regards
PS: sorry for the english I am french.
Hi there! Bonjour! Merci beaucoup pour ecrivir votre “Comment” dans mon Blog. Pardon my poor use of french. I like your suggestions, I recognise some of the names. I think the Steve Nison is an excellent book which I also have. I’ll see if I can update my blog post to include a few of your suggestion too. Take care and many thanks!! Alessio
hi alessio is market wizards and new market wizards two different book or same books
“The small stock trader” by Mika is also a small unique book that covers almost all the major stock market topics such as the traits of a successful small stock trader, how to choose a few simple focus stocks, market sentiment and industry, fundamental analysis, technical analysis, short selling, your edge and competition, catalysts that move the stock prices, stock trading plan, discipline, risk management and psychology. It is a simple book of about 100 small-sized pages (more like a collection of tips, perhaps 4-5 hours read), but it will answer many of your questions, so, it is a great book to start (no need to mention that about 90% of your lessons you are going to learn from your own experience/mistakes). It is also a fun-to-read book, as it is accompanied by a few jokes and observations from poker, intelligence world, relationships, happiness, Zen, and psychology.
Hi,I miss “Way of the Turtle” from Curtis M.Faith in your list.
Here is a list of top notch trading books for both beginners and more advanced traders.
theeverydaytrader.com/trading-books/
I would also suggest recently published “The Emotionally Intelligent Investor: How Self-Awareness, Empathy and Intuition Drive Performance” by Ravee Mehta who previously worked at Soros fund mgmt. he also has an interesting blog post at theemotionallyintelligentinvestor.com.
I have read over 50 stock trading books and there were only a few good ones like:
• The small stock trader by Mika
• “Lessons from the greatest stock traders of all time” and “How legendary traders made millions” both by John Boik
• “Reminiscences of a stock operator” and “How to trade in stocks” both by Jesse Livermore
• How I made $2,000,000 in the stock market by Nicolas Darvas
• How to make money in stocks by Willien O’Neil
Reminiscences of a stock operator by Jesse Livermore