Sometimes proven theory is lacking for good practice. Textbooks on trading should be read in order not to step on rakes that are in fact the only rules you never knew. It is like driving a car: a beginner who has never looked at a driving regulations handbook is virtually doomed to crash or get a fine, at the very least, for driving without a license. In trading, such fines are also called "big losses." It is possible to avoid unpleasant feelings in front of the terminal by having a good understanding of what exactly the market is and how to trade wisely.
Edwin Lefèvre: Reminiscences of a Stock Operator
What kind of book this is: This is probably the most popular book on the market. It is necessary as a primer.
Why You should read it:This book was written when it the world of stock exchanges was just beginning, in 1923. But it is remarkable that it has not lost relevance in the 21st century. The author talks about the greatest speculator in the history of mankind, Jesse Livermore. His biography is given through one of the most interesting reflections of the markets, through an unusual approach to the psychology of crowds in these markets and a unique explanation for jumps in market demand. It is written as if it happened yesterday! This is the foundation needed to recognize that the market is not just a terminal.
Recommended for: A must-read for all those who realize deep down that gambling is a game. It is captivating and a game of chance.
Alexander Elder: Trading for a Living: Psychology, Trading Tactics, Money Management
What kind of book this is: It is, so to speak, the second stage of understanding — to specific actions.
Why You should read it: If you lack specific instructions on how to organize work on the exchange, you will find them in this book. It helps you to quickly and easily learn the skills essential to succeed in the financial markets. In one place, speculator psychology and mass crowd psychology are combined with technical indicators and trading systems, risk control rules and conditions of placing stop orders. This is a true encyclopedia of speculation.
Recommended for: Everyone who wants to learn how to win right, but also to learn lessons from their mistakes.
Jeffrey Katz and Donna McCormick: The Encyclopedia of Trading Strategies
What kind of book this is: If you need a reference book, which you can refer to in search of fresh ideas for the construction of an original trading system, then this book is for you and is simply irreplaceable.
Why You should read it: In essence, the authors are predecessors of the famous "myth-busters." After reading the book, there will be no myths left about markets that are not debunked. You will find a detailed description of all methods and strategies, which just show outstanding results in practice. And the conclusions are based on a large number of tests and historical data on a range of markets.
Recommended for: Everyone will like it who wants to know in advance what methods are potentially loss-making, which are the most risky and which are already known and do not lead to ruin.
Eric L. Nyman: The Small Trader's Encyclopedia
What kind of book this is: This is the perfect guide to build an original and successful trading system.
Why You should read it: To save time visiting all manner of seminars and webinars, which, if you look at them, just regurgitate the contents of this encyclopedia, based on the fact that not everyone has read it. But here, in condensed form, all currently existing trading strategies and techniques are presented.
Recommended for: Those traders and analysts who want to improve the efficiency and reliability of their work. If you still cannot name half a dozen trading strategies, this is a must-read book.
Richard L. Weissman: Mechanical Trading Systems
What kind of book this is: This book, logically, is about mechanical trading systems. Yet they are considered not just as an abstract robot, yet as a painful process of "reprogramming the trader".
Why You should read it: You will find in it the factors that influence the choice of trading system, learn about the possible dangers that may come your way in creating a robot, and of course, ways how to eliminate them. You will probably be enticed by a description of how different systems have been tested on historical and forecast data. Remarkably, instead of a story about risks and yields, the author proposes simple trading systems that can consistently generate positive returns and, most importantly, at the same time minimize the risk of losing everything. Incidentally, the author, with seventeen years' experience in trading, directly says that if you try to attain yields of several hundred percent, your finances are doomed to failure.
Recommended for: All those who want to simplify the process of conquering the market and find a decent aid in the form of a trading robot.
Sheldon Natenberg: Option Volatility & Pricing: Advanced Trading Strategies and Techniques
What kind of book this is: This is a very useful book. Chicago Stock Exchange CBOT traders are trained with it. This is a real textbook, and tested by the time and experience of many professional traders and brokers.
Why You should read it: You will find a lot of useful information here. There is no unnecessary theory, no superfluous simplifications, and no lack of practice. You will learn about different trading strategies, how they work and how they can be used by every one of you according to needs and trading style.
Recommended for: Of course, for all traders who want to extract the maximum profit from possible options, but it is of particular interest to employees of companies active in this field.
Mikhail Chekulaev: Mysteries of Option Trading: Mechanics of Exchange Success
What kind of book this is: This is a full guide capable of bringing you from the wilds of options trading.
Why You should read it: You will get a clear idea as to what fantastic opportunities open up in the process of 24-hour trade and what the minuses of the traditional approach to portfolio management are. The author believes that the only options provide effective market risk management with quality are those which cannot compare to any other trading system.
Recommended for: It is a must-read book for everyone who wishes to discover new trading horizons.
Lewis J. Borsellino: The Day Trader: From the Pit to the PC
What kind of book this is: The author talks about the world's major traders in the world arena — the pit, where futures are traded. It is here that the Titans of trade conclude great deals, or lose everything and break the bank in the blink of an eye. The author tells the story of himself, revealing to us the previously unavailable world of the day trader.
Why You should read it: Among other things, you will gain practical knowledge of the futures markets, trading in the pit, get a feeling for the philosophy of the market, learn the nuances of fundamental and technical analysis, as well as have the rare opportunity to understand the thinking of one of today's most prominent traders. This is a sincere memoir, describing the unique dynamics of a trading hall, and the gifts and blows of the recognized leader of the pit.
Recommended for: A must-read book for all traders as a fascinating story, from which you can gain invaluable experience, without having even been in the pit.
Alexander Elder: Trading for a Living: Psychology, Trading Tactics, Money Management
What kind of book this is: Another very informative and interesting story by Alexander Elder, a professional stockbroker and an expert on trading tactics.
Why You should read it: You will learn about what the methods of risk control are, and that the key to victory over the market is rooted in your psychology. You will become a disciplined player, can avoid emotional traps, and learn to look for bargains using graphics and computer indicators and other analysis tools. You will see how you can easily combine various methods and build an effective speculation system.
Recommended for: A must-read book for anyone who wants to learn how to properly manage their money on their stock account (And we are sure that everyone wants to).
Mike Bellafiore: One Good Trade: Inside the Highly Competitive World of Proprietary Trading
What kind of book this is: This is an interesting story about private trading, i.e. how we all actually need to trade.
Why You should read it: This book reveals all the secrets that the author was able to penetrate throughout his 12-year trading in the markets. He shares invaluable experience and introduces the reader to his trading friends. Of course, some of them are highly successful, but most will tell rather disappointing stories. It is very instructive and valuable book that helps to remove the rose-colored spectacles and approach trading with cold calculation and professionalism.
Recommended for: It will be of interest to all traders trying to implement their own trading strategies.