The Trader’s Literature Study Compendium

Trading is simple in concept and highly challenging in execution. It is a professional skill-set which requires years to develop and master, often without the aid of a teacher or mentor. This compilation of reading materials has been hand-selected in an attempt to provide a comprehensive starting point for the discretionary trader in their journey of understanding. These resources will not make anyone successful (only experience can do that), but they will create a solid baseline of knowledge from which a trader can draw throughout the rest of their career in the financial markets.

Practical Literature

These books offer practical advice and understanding for analysis and trading across a variety of markets and trading styles. Each offers different insights which can be taken at face value or used in combination to create a personalized trading strategy.

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications

- John J. Murphy

One of the best-selling trading manuals since its release in 1999, this book provides a solid guide for traders of all skill levels in understanding price as displayed on a chart, with a specific focus on the futures market.

Encyclopedia of Chart Patterns

-Thomas N. Bulkowski

The bible of technical analysis, this book provides detailed examples of 53 actionable chart patterns with a focus on public equity markets. The author also provides additional insight on technical chart patterns on his free website, thepatternsite.com.

The Intelligent Investor: The Definitive Book on Value Investing

-Benjamin Graham

Hailed by Warren Buffet as “the best book on investing ever written”, this book teaches the wisdom of choosing long-term investments in equity markets and stresses the importance of creating viable strategies with a proven track record. While focused on low time preference investing, there is plenty of knowledge for a position trader to draw from, in addition to understanding the principles of other participants in the markets they trade.

Trader Vic: Methods of a Wall Street Master

-Victor Sperandeo

With a focus on macroeconomic trends and environments, this book illustrates a top-down approach to determining broad trends and the ripple effects they cause, allowing for positional opportunities across global markets.

Trader Vic: Principles of a Professional Speculator

-Victor Sperandeo

The follow-up to the authors original book, the sequel is packed with even more techniques for trend identification and capitalization.

Trading in the Zone

-Mark Douglas

Mark Douglas does an excellent job of explaining common mental blocks in trading and how to avoid them. This book serves as a good primer in thinking in a probabilistic fashion and becoming comfortable with the uncertainty a trader is confronted with in the market every day.

Reminiscences of a Stock Operator

-Edward Lefèvre

A fictionalized account based on the life of Jesse Livermore, one of the greatest traders in history, this book is both an entertaining read and packed with dozens of useful heuristics for any aspiring trader.

How to Trade in Stocks

-Jesse Livermore

From one of the greatest traders in history comes a detailed account of his own strategies and methods in choosing winners for his portfolio as well as various tips on risk and emotional management.

The Alchemy of Finance

-George Soros

From the man who made a fortune betting on the downfall of the British Pound in one of the greatest trades of all time, this book describes his trading methodology and mindset, as well as outlining some of his predictions. Not the easiest read, but well-worth the effort.

What I Learned Losing a Million Dollars

-Jim Paul and Brendan Moynihan

Written by the former governor of the Chicago Mercantile Exchange, this book explores the psychology behind human loss aversion and tolerance for risk, as well as how to combat our innate fears as traders.

The Complete Turtle Trader: How 23 Novice Investors Became Overnight Millionaires

-Michael W. Covel

A recreated historical account of Richard Dennis, a famed trader who turned a group of novices into professional traders with the help of his breakout and trend-following trading system. Known as the Turtles, this book outlines the major points of the strategy and tells an inspiring tale of rags to riches for those disciplined enough to manage themselves and their money.

Studies in Tape Reading

-Richard D. Wyckoff

Wyckoff provides deep insights on the way to view markets, both in trending and ranging environments. With a focus on mid-term positional trading, the lessons from this book are as poignant as ever.

Psychology and Decision-Making Literature

These books are not specific to trading, but can provide insight on a healthy mindset, aid in decision-making and promote the understanding of the human psyche.

Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts

-Annie Duke

One of the more relevant psychology books to trading, Annie writes from the perspective of an ex-professional gambler and decision strategist. She writes on the wisdom of collective over individual results for decision-making over large sample sizes in the midst of uncertainty.

Incerto

-Nassim Nicholas Taleb

A collection of Nassim’s five books (Antifragile, Fooled by Randomness, Skin in the Game, The Black Swan and The Bed of Procrustes), he dives deep into decision-making, probability in mathematics and life and the human reaction to circumstance. His previous work as an options trader informs many of the philosophies described in his writing. His books are surprisingly readable for the heavy-hitting topics he discusses.

Thinking, Fast and Slow

-Daniel Kahneman

Nobel Prize winner Daniel Kahneman outlines the two forms of thinking which our minds utilize throughout our daily lives, as well as the strengths and pitfalls of each. He also writes on fallacies in our thinking, and when to expect and correct them.

Principles: Life and Work

-Ray Dalio

From one of the most successful hedge fund managers in recent years, this books is broad in scope but has quite a bit to offer in terms of setting plans, making decisions and setting goals. While not specific to trading, it will provide you insights on how one of the most successful men in the field of finance organizes his life, business and decisions.

Anecdotal and Investigative Literature

These books are finance-adjacent, often telling stories of successful traders or large downfalls inside the industry. While they may not directly help your trading, they may provide insight on various financial goings-on and history, in addition to providing entertainment value.

Flash Crash: A Trading Savant, a Global Manhunt and the Most Mysterious Market Crash in History

-Liam Vaughan

An enjoyable tale well-told of Navinder Sarao, the trader often blamed for the flash-crash which occurred on May 6th, 2010. Non-fiction.

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution

-Gregory Zuckerman

The account of Jim Simons, manager of the legendary Medallion fund, the most successful quantitative trading fund in history.

Flash Boys

-Michael Lewis

The story of the spectacular rise of high-frequency trading, and its shortcomings. An easily accessible tale of a very inaccessible portion of the financial markets.

The Big Short: Inside the Doomsday Machine

-Michael Lewis

A gripping behind-the-scenes look at the story of the men who bet against the American economy leading up to and during the 2008 financial crisis.

When Genius Failed: The Rise and Fall of Long-Term Capital Management

-Roger Lowenstein

A story of John Meriwether, who founded LCTM and built an impressively profitable system seemingly without regard to leverage, until the liquidity dried up.

Summary

These books are intended as a starting point for any potential trader or investor to learn about the financial markets and speculation. They will not guarantee a profit, nor will absorbing information from them create a winning trader. You must learn from them and apply the lessons yourself in the market, just as the people in these books had to do. Reading is wonderful, but only time and practice in the market can make you money.

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Disclaimers

This piece represents the honest opinion of this author, and does not necessarily reflect any positions I hold.

I am not a financial advisor, and nothing in this release should be construed as financial advice. I may hold speculative positions across any of the markets discussed. This is not a solicitation to buy, sell or otherwise transact in any financial or speculative market, currency, commodity, asset or investment.

You should consult a licensed financial advisor before making investment decisions. I am not responsible for any loss of funds due to any decisions made as a result of this article.