11 Must-Read Books on Trading
There is seemingly an endless amount of financial literature available for those looking to become involved in markets. But there are some texts that stand out above the rest, and are the financial equivalent of classics in my view. Obviously, I haven't read every book on finance, nor is it my desire to do so. If trading is something you wish to undertake, starting with some of these books will definitely help. Most, if not all, are available on Amazon.
*Note that this list is in no particular order.
1. Technical Analysis of Stock Trends by John Magee and Robert Edwards
It's not an exaggeration to say this is probably the greatest book on technical analysis ever written. It's one of the first books ever written on technical analysis, and nine editions have been published since the original version.
2. Technical Analysis of the Financial Markets by John Murphy
I would say this is a close-second in terms of quality, right behind the book listed above.
3. Intermarket Analysis: Profiting from Global Market Relationships by John Murphy
Let's put it this way: If you don't understand capital flows, you might as well just give your money away freely to the market. Capital, like matter, is never created or destroyed. It flows back and forth between various sectors, depending on the economic environment. This book does an excellent job articulating how that works *most of the time.* There are no absolutes in markets; if you want certainty, go buy a CD at a bank.
4. How to Make Money in Stocks by William O'Neil
This is another excellent read. William O'Neil is also the founder of Investor's Business Daily. He has a tried-and-true method to making money in stocks. Much respect for this guy.
5. The Ultimate Book on Stock Market Timing, Volumes 1-5 by Raymond Merriman
The entire series is worth studying. Ray is a good friend of mine, and I've never seen anyone with an ability to consistently time markets like he does. His methods are truly top-notch, and once you learn them, they become priceless. Buy his books directly from him if you're interested.
6. Trade Like a Stock Market Wizard by Mark Minervini
Mark is the winner of several investing championships and competitions. In other words, he is a market wizard. He outlines his methods in this book, and is a must-read for anyone looking to make money in the market.
7. Investment Psychology Explained by Martin Pring
This book does an excellent job articulating the psychology behind trading and investing, and why many people tend to buy the high and sell the low, instead of vice-versa.
8. Encyclopedia of Chart Patterns by Thomas Bulkowski
In this book, Thomas Bulkowski actually takes the time to statistically quantify the success and failure rates of various technical price patterns. It's a big book, but there's a ton of good info in it.
9. Security Analysis by Benjamin Graham and David Dodd
I decided to include this book instead of Graham's other notable work, The Intelligent Investor. Benjamin Graham is considered the godfather of value investing, which is a method that has actually under-performed significantly in recent years. Nonetheless, Warren Buffett made his fortune using this method, so it's worth a read. We find more utility using technical analysis instead of fundamental analysis, but it's still something you should learn, because being able to read a company's balance sheet and financial statements definitely won't hurt you.
10. Reminiscences of a Stock Market Operator by Edwin Lefèvre
This book is what you call a roman à clef, which is a novel based off real people and real events. It's about legendary stock market operator Jesse Livermore, the original Wolf of Wall Street, who accumulated and lost multiple fortunes in the stock market. The Great Depression ruined him financially, and not long after, he committed suicide.
11. The Tunnel Thru the Air; Or, Looking Back from 1940 by W.D. Gann
This book opened Pandora's box for me. This book is cryptically written by a man who was a pioneer in market-time analysis.
Of course, if you're not much a reader, the Mercator offers an alternative for you. Our Global Finance Crash Course is a program specifically tailored to the individual looking to begin trading. This program offers live-time access as well as subscriptions to all current and future reports published by the Mercator.