FAQ Which Books should a Beginner Read?

T2W Bot

Staff member
Dec 19, 2004
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#1
SHORT ANSWER

If there’s a FAQ that’s asked more than any other, then this one must be it! Each title is linked to the T2W Reviews section or to e-retailers where you can read a synopsis of what each book is about. Where a T2W review exists, please indicate whether or not you found it helpful by clicking on the appropriate yes/no button. Additionally, please add your own review of any books that you’ve read!

Most Recommended
These are the books that members recommend time and time again. Please note that none of them are duplicated in the Long Answer (post #2).

Come into my Trading Room and Trading for a Living, both by Dr. Alexander Elder
Good general introduction to the subject of trading.

How I Made $2,000,000 in the Stock Market by Nicolas Darvas
A light and undemanding trading autobiograpghy by a legendary 'retail' trader / investor, which continues to provide insight and inspiration to this day for new traders wanting to replicate his success.

Market Wizards and New Market Wizards, both by Jack D. Schwager
Detailed interviews with some of the world's most successful traders, providing real insight into their market beliefs, strategies and motives.

Mastering the Trade by John F. Carter
John Carter's book is one that gets mentioned repeatedly as one of the few texts that provides real insight into how to trade today's market.

Reminiscences of a Stock Operator by Edwin Lefevre
If there is one book that all traders own, love and recommend without hesitation - it's this one. A timeless and classic text that is essential reading!

Technical Analysis of the Financial Markets by John J. Murphy
Considered by many to be the bible of technical analysis.

The Essentials of Trading by John Forman
An excellent all round introduction to the subject of trading - especially for Forex traders. John is known as 'Rhody Trader' here on T2W and very good at answering questions and helping new members.

Trading in the Zone and The Disciplined Trader, both by Mark Douglas
A commonly held belief amongst many traders is that the obstacle to trading profits isn't the markets or your methodology - it's you! These books are widely regarded as essential reading to help you develop the right mindset to trade successfully.
 
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T2W Bot

Staff member
Dec 19, 2004
1,401
35
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#2
LONG ANSWER

There are literally thousands of books about trading and investing. The ones listed here are those that members have mentioned repeatedly over the years. To make the list more user friendly, the books are divided into some basic categories.

Introduction to Trading
As a rule of thumb, books that try to cover all the bases tend to suffer from the ‘Jack of all trades - master of none’ syndrome. However, as an introduction to the subject, here are some primers for newbies to start with.
High Probability Trading by Marcel Link
Trade Your Way to Financial Freedom by Van K. Tharp
Trading FAQs by John Forman
Trading for Dummies by Michael Griffis & Lita Epstein

General
A hotchpotch collection of trading based books that don’t fit comfortably into any other category!
Option Volatility & Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg
The Way to Trade by John Piper
Way of the Turtle by Curtis M. Faith

Psychology
Another popular FAQ is ‘what qualifications should I get to become a trader?’ Hot on the heels of the usual answers like a degree in maths or economics, comes a degree in psychology. Traders who understand market ‘sentiment’, i.e. what participants are thinking and feeling - and are able to keep their own emotions in check – have a solid foundation for success in the markets.
Enhancing Trader Performance: Proven Strategies from the Cutting Edge of Trading Psychology by Brett N. Steenbarger
Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
Feel the Fear and Do it Anyway by Susan Jeffers

Trading & Technical Analysis
As a rule of thumb, traders tend to focus on technical analysis (TA) of charts in order to make their trading decisions. These books focus on this diverse and contentious art.
Encyclopedia of Chart Patterns by Thomas N. Bulkowski
Getting Started in Technical Analysis by Jack D. Schwager
Investor’s Guide to Charting by Alistair Blair
Japanese Candlestick Charting Techniques by Steve Nison
Technical Analysis and Stock Market Profits by Richard Schabacker
Technical Analysis for Dummies by Barbara Rockefeller
Technical Analysis from A-Z by Steven B. Achelis
The Definitive Guide to Point & Figure by Jeremy Du Plessis

Investing & Fundamental Analysis
This tends to be the preferred method for long term buy and hold investors to make their investing decisions. Increasingly, traders are adopting a more holistic approach and like to incorporate fundamentals into their practice.
A Random Walk Down Wall Street by Burton G. Malkiel
How to Make Money in Stocks by William J. O’Neil
If it’s Raining in Brazil, Buy Starbucks by Peter Navarro
The Intelligent Investor by Benjamin Graham
You Can be a Stock Market Genius by Joel Greenblatt

Techniques & Strategies
As the heading suggests, these books focus on specific trading methodologies, along with the skills and tools required to implement them.
Marc Rivalland on Swing Trading by Marc Rivalland
Street Smarts by Linda Bradford Raschke
The Financial Spread Betting Handbook by Malcom Pryor
The Master Swing Trader by Alan S. Farley
Trading Day by Day by F.H. ‘Chick’ Goslin

Tape Reading
'Trading naked', 'darksiders' and 'tape reading' are all terms used to describe traders who rely on raw price action to trade, possibly accompanied by volume, trend, support & resistance, level 2 and time & sales. In other words, they don't use indicators like MACD, CCI or RSI etc.
Studies in Tape Reading by Rollo Tape (Richard Wyckoff)
Tape Reading and Market Tactics by Humphrey B. Neill
Techniques of Tape Reading by Vadym Graifer & Christopher Schumacher

Miscellaneous
Traders get ideas and inspiration from all walks of life. The books listed in this section are applicable to traders, although you’re unlikely to find them in the ‘Investing’ or ‘Personal Finance’ sections of your local library, book shop or e-retailer.
Fooled by Randomness and Black Swan, both by Nassim Nicholas Taleb
The Art of War by Sun Tzu
Zen and the Art of Poker by Larry W. Phillips
 
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T2W Bot

Staff member
Dec 19, 2004
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#3
USEFUL LINKS

If you find other threads, Articles or sites on your travels around the net that are relevant to this FAQ, please add a link to them in this thread, outlining what it is that you like about them. Thanks!

T2W THREADS
Must-have trading book...
A long running thread in which members post their book recommendations.

T2W ARTICLES
An Example of Tape Reading by Richard Joyson
An 'over the shoulder' view showing how T2W's very own Mr. Charts reads the tape.

EXTERNAL LINKS
None here? If you find a good one, let us know and we’ll add it!
 
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timsk

Well-known member
Mar 18, 2002
6,764
1,726
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#4
I've done some fairly heavy duty housekeeping to this thread, so if your contribution is no longer here it will be because your recommendation(s) is already listed in post #1 or post #2. Occasionally, I've let a duplicated recommendation stand if it's part of a group of books (e.g. by the same author) or, more likely, if the poster says what they like about the book(s).

If you're thinking of contributing to the thread - and please do - only list books that are NOT yet featured in posts 1 and 2. If you can't resist adding your voice of support to existing recommendations and you want your post to stand, please add insightful, instructive and helpful comments about what you liked about the book(s)! Better still, head on over to Book Reviews and post your thoughts there!

For more info' about why posts to the FAQ threads are edited or deleted - check out the How the FAQ Forum Works Sticky.
Thanks,
timsk.
 
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Windowsill

Active member
Dec 12, 2004
305
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#8
No trading books whatsoever. How I made $2,000,000 by Nicolas Darvas. Then read a book on Psychology. Then just look into graphs, not at them. Then think about what you are looking at & what you moves you can realistically trade. Then think again.!! and so on. and so on. etc....
 
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combotrader

Active member
Jul 11, 2006
187
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London
#9
1) Mark Douglas for understanding losing is normal

2) Van Tharp for interst and methods

3) Natenberg for options - a must read. Why do you think everyone spreadbets and all the pros use options ? Then think why options are so poorly advertised to beginners.

4) The Education of a Speculator and Practical Speculation, both by Victor Niederhoffer - for getting an appetite for the statistical side of things.

I could go on...and so could everyone else.
Bottom line - books talk but only you can walk the line - just pull the trigger.
 
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Aug 11, 2003
5,107
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#10
Never read a trading book in my life.

Spent more hours watching price action than anything else in life though... Nothing beats experience IMO.
 
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jonj

Active member
Feb 23, 2007
401
9
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#12
by the time i bought my first and only 2 books i had already learned everything they had to show me for free on internet from sites like this.(thanksT2W)
my advise would be to NOT to buy a book for about 6 months and by then you will probably know which one to buy! :)
 

fayalac

Active member
May 3, 2008
560
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#13
If youre starting, i suggest you to read all the material available, there are lots!.
Read everything and then decide whats usefull and whats not, to decide you must make paper trading, while proving what you read.
 

Victor90

Active member
May 6, 2008
251
5
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#15
Hi,
There are so manny good books out there (and even more that are cr*p). I would recommend to start with the one i started with: The 10 Essentials of Forex Trading: The Rules for Turning Trading Patterns Into Profit by Jared Martinez.

I know its not complete in all the details, but on the other hand he takes up almost all issues of forex trading: how to trade, phsycology, TA, Fundamental Analysis and so on... And its fun to read and its only 300 pages. (y)

Btw, its possible to download a free e-book copy of it at his homepage: FOREX Education | Forex currency trading for beginners| Forex Training | Learn Forex Trading: Market Traders Institute Inc.

:)
 
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Jun 7, 2008
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0
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#16
Beginner's books

I would recommend Trading By The Book by Joe Ross. It introduces the 123 which is a pattern that in frequency, beats the heck out of triangles, heads and shoulders, flags and all the traditional patterns of technical analysis you traditionally read of. You can also find articles about the 123 going online searching for Joe Ross.
Trading in the Zone by Mark Douglas, I definitely agree with the other threads on that.
Street Smarts by Raschke and Connors + I would strongly recommend visiting Linda Raschke's website to view all the presentation and read all the free articles. The lectures are well worth paying for.
 
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Jun 7, 2008
16
0
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#17
What books to read for beginners 2

There's another book I forgot to mention which is actually great for beginners:
How I Trade for a Living by Gary Smith, read the review of this book on the Travismorien.com website, this is also a great website for beginners to look at as the investment FAQ is absolutely packed full of information on trading, investing and real estate. Travis Morien isn't a specialist trader however and his mindframe is more biased towards value investing.

A word on Gary Smith's book: it's one of the only books out there that presents a realistic view of the risks of trading. If anything Gary Smith gives you a good example of what not to do, so there's a lot to learn from his mistakes. As a beginner you'll probably come across this statistic quite often: 95% of traders end up net losers. We're not talking about your average punter here. People who get into trading are often highly educated high achievers. Even on CBOE, 50% of the traders don't make enough to cover their annual membership fees. This is not a joke. Trying to make money consistently trading is probably about as difficult as trying to get into an investment bank. The hurdles and the setbacks should not be underestimated. I really like this book because one of the most useful things you can learn is how to improve your judgement. That's going to come primarily from experience but if you can get a bit of useful advice from others to point you in the right direction, that's handy. Considering that the world of trading offers an unlimited number of possibilities in between the techniques and the markets you can trade, it's necessary if you want to get good at it to practice on one market and to practice one technique. Skill comes through repetition and if you get lost in the sea of possibilities offered by trading you'll get nowhere. So the first thing that this book does is that it describes how Gary Smith spent 20 years trading commodities and stocks and shares getting nowhere before deciding to focus on one market. Then it explains what market he chose, why and how he trades it. This book isn't going to give you fantastic techniques and setups but I think it's an excellent baptism in what to expect when you enter the fascinating, dangerous and magnetic world of trading.
 
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normbeef

Active member
Jan 22, 2008
358
48
38
#18
I Ching or Book of Changes - Yin and yang... etc... order in chance events... acceptance of the inevitability of change

Fooled by Randomness by Nassim Nicholas Taleb -- if not for anything else... learn the lesson about skewness / disproportional odds and the dangers of information.... also some good lessons and funny stories about operating in uncertainty
 
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