The 12 Best Books on Trading Strategies: Your Ultimate Reading List

When it comes to mastering the markets, having a strong foundation of knowledge is key. Over the years, I’ve come across and read a variety of trading strategy books that have made a significant impact on my approach to trading. Whether you’re just getting started as a beginner or are looking to sharpen your advanced trading skills, the following list offers valuable insights for traders at all levels. These books cover a range of topics, from technical analysis and risk management to trading psychology, and I highly recommend them to anyone looking to deepen their understanding and enhance their trading performance.

1. The Education Of A Speculator – Victor Niederhoffer: A very tough read, but very educational. He uses a lot of metaphors from other fields and relates it to trading. Very good to learn to think outside the box. However, it is only readable if you have some years of experience trading. Niederhoffer’s Practical Speculation is also a very good book. Together these two books give you plenty of trading lessons.
2. The Way Of The Turtle – Curtis Faith: This relatively short book describes the main components of trading in a very easy way. Trading does not need to be complicated!
3. How I Trade For A Living – Gary Smith: This book is now rather old, from 1998, but I still find it worthwhile. We just reread it. The reason is simple: he explains his way from a novice until he becomes a rational trader. Smith spent about 20 years dreaming about trading and trying to make it out – unsuccessfully. He explains his 33 years of trading, most of them unprofitable. I believe Smith explains a typical trading career and a lot can be learned. His methods are discretionary, but it’s his evolution as an interesting trader. Smith is an “Average Joe” from Kentucky and a retail trader. Just as interesting is that Gary smith contacted us in 2023 to say he appreciated our review of his book. At 75 years of age, he’s still plugging away from his base in the Kentucky countryside!
4. Market Wizards by Jack Schwager: In our opinion not much to be learned, but instead a lot of motivation. One more review.
5. Fooled By Randomness – Nassim Taleb. This guy is in bitter rivalry with Niederhoffer. Still, this book is very good. Why? Because we can guarantee you that you are not as good as you think you are. This book deals with the element of randomness, cyclical randomness and luck. Obviously, Taleb thinks highly of himself and the whole book has a sense of “upper stiff lip”, but it’s still a good read. It opposes much of Niederhoffer’s viewpoint, but that’s exactly the value of the book.
6. Pit Bull – Marty Schwartz: You don’t get any strategies from this book, but more motivation. This is a really good and funny read.
7. Trading In The Zone – Mark Douglas: “Trading in the Zone” emphasizes the importance of psychological discipline in trading, highlighting how a trader’s mindset can significantly impact decision-making and performance. It teaches that achieving a state of mental clarity and confidence can lead to more consistent and successful trading outcomes.
8. Trade Your Way to Financial Freedom – Van Tharp: Van Tharp’s Trade Your Way to Financial Freedom is a comprehensive guide to trading that emphasizes the importance of understanding your own psychology and developing a personalized system. The book is highly recommended for traders seeking to improve their strategy development and risk management skills.
9. Technical Analysis of the Financial Markets – John Murphy: John Murphy’s “Technical Analysis of the Financial Markets” serves as a cornerstone for traders looking to master the intricacies of market trends, charting methods, and technical indicators. Its comprehensive approach, coupled with practical insights and intermarket analysis, makes it a must-read for both beginners and experienced traders aiming to refine their strategies.
10. The New Market Wizards by Jack Schwager is a classic book in trading literature, featuring interviews with top traders who share their strategies, philosophies, and insights. Through candid conversations, Schwager explores the mindset and techniques behind their success, providing readers with valuable lessons in risk management, discipline, and the psychology of trading. The book is a sequel to Market Wizards and continues to offer timeless wisdom for both novice and experienced traders seeking to improve their performance in the markets.
11. Trading Systems and Methods by Perry J. Kaufman is a comprehensive guide to designing and evaluating trading strategies across various asset classes. It covers both basic and advanced technical analysis methods, including trend-following, mean-reversion, volatility, and momentum strategies. Kaufman explains mathematical models, risk management, optimization, and system testing, offering practical insights for traders looking to develop or refine trading systems. This edition also includes updates on algorithmic trading and market data. It is an essential resource for professional traders, quants, and analysts.
12. Reminiscences of a Stock Operator by Edwin Lefèvre is a fictionalized biography of legendary trader Jesse Livermore. The book follows his rise from a young boy placing bets on horse races to becoming one of the most successful and controversial stock traders. It covers his trading strategies, the psychology of the markets, and the emotional highs and lows of speculation. The book offers timeless lessons on risk management, market manipulation, and the importance of learning from mistakes in trading.
    
    

We have also written many articles about famous traders and trading books.

FAQ:

– What are some recommended trading books for those looking to enhance their trading knowledge?

We have listed six trading books worth considering: “The Education Of A Speculator” by Victor Niederhoffer, “The Way Of The Turtle” by Curtis Faith, “How I Trade For A Living” by Gary Smith, “Market Wizards” by Jack Schwager, “Fooled By Randomness” by Nassim Taleb, and “Pit Bull” by Marty Schwartz.

– What can you tell us about “The Education Of A Speculator” by Victor Niederhoffer?

“The Education Of A Speculator” is an educational yet challenging book that uses metaphors from various fields to relate to trading. It encourages thinking outside the box and is most suitable for those with trading experience.

– What is “Fooled By Randomness” by Nassim Taleb about, and why is it recommended for traders?

“Fooled By Randomness” delves into the concepts of randomness, cyclical randomness, and luck. While it may contrast with some viewpoints, it’s valuable for recognizing one’s limitations and biases, and it challenges overconfidence in trading.