Tom’s Top 20 Trading Books

Tom Hougaard provides list of books, which if you read just half of them, you won’t suffer the disillusion and the aching wallet. So welcome to Tom’s Top 20 Trading Books.

I found all the books that I really value on Amazon.co.uk and, the books that have actually taught me something about trading. My intention was to spend £2500 on books, just so I could illustrate the point, the ridiculous knowledge discrepancy between £2500 of books purchased on Amazon and a weekend course.

But I failed. I only managed to find 20 trading books, which I would recommend to my own child, if he was interested in trading. I would say: read these and then we can talk strategies.

So how much did those 20 books cost? In fact they cost only 13% of what Nina paid for her “expert” Forex course. Yes, that is right. Those 20 books, which will teach you a solid foundation of trading and investing, cost only £349.

I have listed the books below, in no particular order, but with my comments next to them.

  • Pit Bull: Lessons from Wall Street’s Champion Trader by Marty Schwartz: an outrageous book about an outrageous trader, its inspiring and uplifting and although it doesn’t give advice on techniques, it gives a great account of what it takes to be a trader)
  • Market Wizards and New Market Wizards : interviews with traders from the US – great read and you get a good sense of what it takes to make it in this competitive industry
  • Hedge Fund Market Wizards by Ed Seykota: I love Ed Seykota because he once taught a trading course over 12 weeks, spending 10 of the 12 weeks teaching the student what to do when they didn’t follow the rules set out in the first two weeks of the courses
  • Charlie D: The Story of the Legendary Bond Trader : like Pit Bull it is a great story about a truly remarkable individual trading in the pits in Chicago
  • 7 Winning Strategies for Trading Forex:  It is a basic but solid book and the strategies are many times better than the one that Nina was taught
  • The Financial Spread Betting Handbook: I put in Malcolm Pryor’s book in here for anyone who doesn’t know what spread betting is about.
  • Opening Price Principle: My mentor Larry Pesavento wrote this book about the markets tendency to move away from the opening price 70% of the time. It is an easy read, so it’s worth the £10.
  • Fibonacci Ratios with Pattern Recognition: THIS IS A MUST HAVE book, even if you are not a fan of technical analysis. Larry goes to great lengths explaining patterns and how they unfold in the markets. It is one of the more expensive books on the list, but deservedly so.
  • The Naked Trader: How anyone can make money trading shares. The book turned into a course would have cost Nina £4000 rather than the £9 I paid for it. Enough said.
  • The Daily Trading Coach: 101 lessons for becoming your own trading psychologist: (this is my bible – thank you for writing this book Mr Steenbarger)
  • High Performance Trading by Steve Ward: a great book by our local London talent, and there is even a quote from yours truly in there somewhere, saying that trading is hard work (sorry for stating the obvious again)
  • Reminiscences of a stock operator: If you want to learn about the markets and what moves them up or down, then you must buy this book. It is really a story about Jesse Livermore, one of the true greats of the last century, but unfortunately with a propensity to yo-yo trading.
  • Trading in the zone by Mark Douglas: this is a timeless classic on trading psychology, a tough read, but worth it over time.
  • Technical Analysis of the financial market by Murphy: this was my first TA book and it taught me more about technical analysis than any course ever could.
  • Japanese Candlestick charting by Steve Nison: Here is a piece of math for you: Nina spent £2500 for a 400 page course manual. So she paid £6.25 per page. There are 10 pages on candle charts (a disgrace – to say the least), costing her £62.50. What Nina learnt over those 10 pages at the Forex Expert course, Steve Nison will unveil on the leaf of the cover page of his bible on candle charts, and it will only cost you £41.
  • Trade Your way to financial freedom by Tharp – a great read, but not for beginners
  • Trading for a living: this is a great place to start for a beginner, Alexander Elder does a great job in telling it as it is, and his follow-up book “Come into my trading room” is also worth the money.

So there you have it. My list of books, which if you read just half of them, you won’t suffer a disillusion and aching wallet. Once you then have a solid foundation, then you can consider attending courses.

Further article details in Toms article The Danger of Trading Courses