My Ten Favorite Trading Books
In this tip I want to briefly describe my ten favorite trading books. I'm not going to give them in any particular order, because I'm not sure I can rank them that concisely. However, these are my ten favorites and I've ranked them alphabetically by author, except that three of the books are my own and I've included them at the end. In addition, most of them are classics, so my description of each of them will be brief.
1) Easterling, Ed: Unexpected Returns: Understanding Secular Stock Market Cycles. Fort Bragg, CA: Cypress House, 2005. This is a self published book in which Ed does a masterful job of helping people get a major perspective of why the stock may do what it's going to do. If you want to understand the big picture, then this book is a must read. Michael Alexander's book, Stock Market Cycles is also a favorite book, but I only wanted to pick one book of this type, so this is the one I selected.
2) Faith, Curtis: Way of the Turtle. New York: McGraw-Hill, 2007. I don't want to say a lot more about this book because it was the topic of last weeks tip. However, I was impressed enough by it that I begged to write the foreword and I did.
3) Graham, Benjamin. The Intelligent Investor: The Classic Text on Value Investing. New York: Harper, 1995. Value investing is one of the best ways for the long term investor to beat the market. This is the classic text of value investing and it's the essence behind much of what Warren Buffet does. So if you have the desire to do this sort of investing, then this book is a must read.
4) LeBeau, Charles and David W. Lucas. The Technical Trader's Guide to Computer Analysis of the Future's Market. Homewood, IL: Irwin, 1992. I've been associated with Chuck for a long time and he's a presenter in our systems workshop. And the reason he is a presenter is this book. It probably does the best job of any book up to it's publication date of taking apart systems into components and showing you how to logically think about and develop systems.
5) Schwager, Jack. Market Wizards. New York: Institute of Finance, 1988. Jack Schwager interviews 16 of the top traders in the world and he also interviewed me. This book, like no other until its sequel, really elucidates what's important for trading success. I've always said that trading success consists of the commonalities of what great traders do and how they think. And if you want to learn that, then this book is the place to start.
6) Schwager, Jack. The New Market Wizards. New York: Harper Collins, 1992. There are a lot more than 16 great traders and Schwager presents some more of them in this classic book. I personally think the William Eckhardt's interview alone is worth the price of the book.
7) Wilder, Wells. New Concepts in Technical Analysis. Greensboro, NC: Trend Research, 1978. This is the oldest book on my list and I've included it because it is the original presentation of some of the classical tools of trading including ADX, ATR, and many other classics. If you are not familiar with these concepts, now is the time to start and this is the book to start with.
8) The Definitive Guide to Position Sizing: How to Evaluate Your System and Use Position Sizing to Meet Your Objectives. Cary, NC: IITM, 2007. I'm a little reluctant to put this book in my list because we haven't released it yet, but it's already written and I think it is a new classic. It includes how to measure the quality of your system objectively, no matter what style of trading you have or what instruments you trade. And then it includes everything you could possibly want to know about how to use position sizing, depending upon the quality of your system, to meet your objectives. It's that simple and I've very excited about it. We'll probably release it in 3-4 months.
9) The Peak Performance Course for Traders and Investor (5 books I'll count as one). Cary, NC: Van Tharp, 1989. When I developed the Investment Psychology Inventory to measure strengths and weaknesses of traders, people started saying, “I totally agree with your analysis, but how can I use this information to improve my trading.” As a result, I wrote the home study course over a five year period to do just that. The course should be must reading for anyone who is serious about trading or investing. And if there is a number one choice among the ten books, this is it.
10) Trade Your Way to Financial Freedom, 2nd Edition. New York: McGraw-Hill, 2007. I've been profiling this book in my tips over the last few months. If you really want to understand systems and how to approach the markets, then this book is also must reading.
Dr. Van K Tharp
Peak Performance Course for Investors and Traders
This home study course is Dr. Tharp's masterpiece. It's designed for all levels of investors and traders - beginners, advanced, unsuccessful traders seeking to improve their performance, and successful traders who want to be more successful.