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Recommended Best Trading & Investing Books

 

Last Updated : October 2008
By Nadeem Walayat

These are my recommended Best Trading & Investing books. Most of these titles are my personal favourites gleaned over a 21 year trading history. The list contains some real gems that over the years I have had the pleasure of re-reading several times over. I have also written short reviews on the real gems to give you a taste of what's inside.

All of the books are available from Amazon.com.

Commodity Markets

How to Make Profits In Commodities - This is one of the first trading books that I bought and dates back to either late 1987 or earlier 1988. Not only is this one of my first but also one of the best. It teaches the importance of studying the markets in terms of the price action rather than methodology i.e. the plethora of indicators that traders are overwhelmed with today, and whilst it does not say its a swing trading book however what it represents is a model for swing trading. The book was first published in 1942 and my copy dates as 1976, written by the legendary WD Gann, now don't take this as a cue to get sucked into Gann Analysis which is a never ending quest for the holy grail as I treat Gann analysis as both starting and ending in THIS one book ! However I should point out that is not a beginners book, in that it requires dedicated study to get the most out of it which implies a significant commitment of time, much more than say just reading a book over a couple of weeks.

Yes, 1942 or the revisions during 1951 mean that the book is not up to date in many aspects, but the fundamentals and building blocks for developing a successful trading strategy are there in how to interpret price action.

As I alluded to earlier the book covers swing analysis and trading rules but does not touch on any of his geometric work i.e. gann angles, master squares etc.. Treat it both as a great study guide that you should come back to on a regular basis over your trading life-time well worth the $50 bucks I paid for it 2 decades ago.

 
Economics, Real Estate & Emerging Markets
 
 
 
Stock Index Futures Trading
 
Stock Market Investing

Reminiscences of a Stock Operator by Edwin Lefèvre is probably one of the best and well known books on the subject of financial speculation, the book was published as the fictional biography of “Larry Livingston,” but is actually an biography of Jesse Livermore, one of the first famous stock & commodity traders ever. The man started trading after working as a boy in a brokerage house and trading in several of the tiny brokerages called “bucket shops” where small time traders would bet against the house, and eventually went on to become one of the most influential and widely-known traders of his day. He made, lost, and re-made millions at a time.

What you will get from the book are some classic mistakes and the lessons learned from them; some of the best catch phrases in the business; insight into how the markets were manipulated then and probably still are now. One of the most important lessons mentioned in the book is that a trader does not have to be invested in the market all the time.

This is the book from which almost every subsequent general trading book is derived. If you have ever wondered where the trading rule "Never average down" came from, just turn to page 154. Where did the comparison between greed and fear first originate ? Look to page 130.

Many rules to live by that were introduced in LeFevres book are:

-The trend is your friend.
-History repeats itself
-Never average down.
-No stock is too high to buy or too low to sell.
-Let your winners run and cut your losses quickly.

Many aspects of the financial markets are still very much the same as they were in Livermore's day. As he points out, human nature is a constant, an observation that is as true today as it was then. Among the many other insights in this book. The book was originally published in 1923, and remains the most widely read, highly recommended investment book written to date. Generations of investors have found that it has more to teach them about themselves and other investors than years of experience in the market. This is a timeless tale that will enrich the lives and portfolios of today's investors, just as it has generations past.

 
Technical Analysis & Theories

Technical Analysis of the Financial Markets - This was the first technical analysis book I bought in the late 1980's which was purchased with a view to using it as a study book towards working towards the diploma in technical analysis issued by the Society of Technical Analysts in the UK. The book covers virtual every aspect of technical analysis and trading tactics and seeks to be the definitive guide from the basics to the advanced. I rate this as a great book for beginners as you really do need to touch on all aspects of analysis as a basic primer to help determine which direction your going to go after having read the book and for instance you see the answer to trading success lies in Japanese candlesticks which you may not have understood until you happened on the section in this book.

Therefore its a must read for especially beginners, which helps to determine which direction to go in next.

The Best Trendline Methods of Alan Andrews - Since I am basically a trendlines, support and resistance and swings trader, books that focus on these areas of TA usual get my attention. This is a relatively recent book on trendlines, specifically focusing on the work of Andrews “Pitchforks”, as well as covering research by Mikula, for me this book basically reinforces what I already had learned from the charts over the last 15 years or so up until I came across the book but also did give me some new insights as I had more or less scrapped pitchforks from my own trading a good 8 years earlier in my own version of the great purge when I preceded to scrap much of the TA I had learned from my trading methodology.

The book is well written, short and sweet just the way I like it so that a trader can get on with practicing what is being preached rather than working through a load of waffle. - I recommend this book to all level of traders from beginners to advanced.

 

Happy reading, trading and investing !

Nadeem Walayat.
Editor, The Market Oracle