I had a wonderful conversation with a retail trader who has read 194 trading books. Wow!
This gentlemen has a passion for trading and reading about trading. I was actually speaking to him about our firm backing his trading. He has developed a track record while working full-time in the Heartland.
For those of you trading retail who dream of one day trading pro, here is one guy taking the steps to achieve that goal. It can be done!
I thought it would be interesting to the trading community to learn his Top Ten Trading Books since he has read so many. (In any list like this, there will be many great contributions to the trading literature excluded. My apologies in advance to those outstanding authors and hope those who read this blog will add their favorites in the comments section.) Below is his aspiring pro trader’s list.
Top Ten Trading Books I Have Read (in no particular order)
1. Reminiscences of a Stock Operator by Edwin Lefevre (the Illustrated Edition!)
– This was probably one of the first couple of trading books I ever read and it completely captured my imagination. At the time of reading this, I was just starting to trade stocks and it was then that I fell in love with trading.
2. The Market Wizard Books by Jack Schwager (Market Wizards, Hedge Fund Market Wizards, The New Market Wizards, and Stock Market Wizards)
– I really enjoy these books and keep coming back to them to reread. I believe there is a great deal of wisdom to be gained from learning from the people who are the best in the world in an area where you also strive to excel. I think I most enjoyed the original Market Wizards book with Paul Tudor Jones, Ed Seykota, Bruce Kovner, Michael Marcus, William O’Neill, Marty Schwartz, etc.
3. How to Make Money in Stocks (4th Edition) by William O’Neill
– This was also one of the very first if not the first books on trading I ever read. I love that it combines the basics of technical analysis along with important fundamental components that make for big stock moves.
4. The Playbook by Mike Bellafiore
– One Good Trade introduced me to the world of proprietary trading. But The Playbook was more influential on my trading. That book really got through to me what kind of work is needed and expected of a successful trader. It gave me an idea of what kind of “process” I should be going through each day in order to prepare and then review in order to keep getting better each day.
5. Market In Profile by Jim Dalton
– This was Jim’s second book on Market Profile but I believe it is the better of the two. This book contains more of the nuances of Market Profile and contains more of his recent thinking regarding the profile as compared to his first book. My knowledge of the profile and the help I’ve gotten from Jim has helped me tremendously.
6. Trading In The Zone by Mark Douglas
– This book helped me to think in terms of finding an edge and then acting consistently, without hesitation, and with discipline to exploit my edge. The book talked a great deal about thinking in probabilities. Overall, this was a great book for developing the proper trading mindset.
7. Trading To Win by Ari Kiev
– This is a book I’m just now reading and it’s already in my top ten. Might be subject to recency bias? I consider myself a student of trading psychology because I will do whatever it takes to enhance my edge. The great thing about this book is that it gets specific with ideas for visualization exercises as well as ideas for how to center yourself.
8. Enhancing Trader Performance by Brett Steenbarger
– I love all of Dr. Steenbarger’s work and I always read his blog. This book includes sections on cognitive behavioral techniques to enhance trading performance.
9. The Psychology of Trading by Brett Steenbarger
– Another great book. My biggest takeaway from this book was about how we should learn to observe ourselves while we are trading. Dr. Steenbarger calls it “invoking our internal observer.”
10. Thinking, Fast and Slow by Daniel Kahneman
– This is not specifically a trading book but I think it has many applications to trading. This book talks about the difference between your System 1 (intuitive/fast) thinking and your System 2 (Slow) thinking. The book goes on to describe the amazing thinking your system 1 can do but also describe where your system 1 thinking can get you into trouble. You can benefit greatly be recognizing when your system 1 is in control and then using your system 2 in conjunction with system 1 for better decision making.
At SMBU we ask: What books would you have included?
“You can be better tomorrow than you are today!”
Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of One Good Tradeand The PlayBook. He welcomes your trading questions at [email protected]
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