In the fast-moving world of financial markets, knowledge is power. Whether you’re a novice trader or a seasoned investor, it’s important to keep learning, testing and enhancing your trading approach. A good way to expand your trading knowledge is by reading books by the best experts in the field.
These 4 books are a great source of trading knowledge gathered over years of testing different trading methods, tools for analysis and trading ideas. Let’s dive in to learn more about trading and enhance your approach with the wisdom from the most prominent trading experts.
1. Long-Term Secrets to Short-Term Trading – Larry Williams
This bestseller may be considered one of the top trading books to read. Written by a highly successful trader with over 60 years of trading experience, this book uncovers the secrets of short-term trading in an unpredictable and volatile market.
It also explains the fundamentals of market movements and cycles, the right time for potential trade exit points and offers information about the most effective short-term trading approaches.
About the Author: Larry Williams has written 11 books about trading and even created several technical indicators, including Williams %R. He is also famous for winning the 1987 World Cup Championship of Futures Trading. He started it with just $10,000 and turned the investment into $1,100,000 (11,300% net return!) in a 12-month competition with real money. His daughter Michelle Williams – a famous Hollywood actress – also won this contest years later, which may be the proof that Larry’s approach is worth a glance.
The moment you learn to trade reality, not desire, you will drill a wall of fire to become a successful trader.
Larry Williams
Williams, Larry. Long-Term Secrets to Short-Term Trading. John Wiley & Sons, 2nd edition, January 2012.
2. Technical Analysis of the Financial Markets – John J. Murphy
This detailed guide to technical analysis is yet another great trading book to read. It covers the main concepts of technical analysis for trading, as well us popular tools and techniques. Check out a detailed overview of the main ideas offered in this book and learn how they may be applied in trading here: 10 Laws of Technical Trading.
About the Author: John Murphy started his career as an assistant in a Wall Street financial firm. He then moved on to become a director of technical analysis, the author of several books about trading for novice and experienced traders and a technical analyst for a business news channel CNBC. He currently works as the chief technical analyst at StockCharts.com – a leading financial analysis platform.
Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
John J. Murphy
Murphy, John J. Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. Penguin Publishing Group, 1999.
3. How to Make Money in Stocks – William J. O’Neil
This bestseller is widely considered as one of the best books about trading stocks. It includes techniques for spotting stocks that might have a good potential at an early stage, provides information on how to identify stocks and ETFs that might potentially be on top of the markets and shows how to use charts to identify market trends.
About the Author: William O’Neil worked his way up from a regular stockbroker to the creator of a unique CAN SLIM approach and the founder of the influential investment publication Investor’s Business Daily. His main focus was stock trading: according to his approach, investors may be able to choose stocks based on a list of important metrics, which include a company’s fundamentals and financial performance.
Plot out your mistakes on charts, study them, and write some additional rules in order to correct your mistakes and the actions that cost you money.
William J. O’Neil
O’Neil, William. How to Make Money in Stocks: A Winning System in Good Times Or Bad. McGraw-Hill, 1995.
4. Trade Your Way to Financial Freedom – Van K. Tharp
This may be considered one of the most popular books about trading: it offers a unique view on creating a personal trading system that might work best for an individual trader. It addresses the psychological biases and beliefs that may limit traders’ ability to achieve desired results and reach their full potential.
According to the author, every trader can create a trading method tailored to their personal needs and goals. This book may serve as a guide to traders hoping to enhance their approach and get a step closer to achieving their financial goals.
About the Author: Van Tharp started his trading career after receiving a degree in psychology. He wasn’t successful at first. After losing his entire account twice, he decided to take a more scientific approach and do some research. This led to the creation of the Trading Excellence Model, which covers 5 key areas for trading success. He also founded the Van Tharp Institute that supports trades on their journey of enhancing trading skills and reaching their goals.
The top traders that I’ve worked with began their careers with an extensive study of the markets. They developed and refined models of how to trade. They mentally rehearsed what they wanted to do extensively until they had the belief that they would win. At this point, they had both the confidence and the commitment necessary to produce success.
Van K. Tharp
Tharp. Van K. Trade Your Way to Financial Freedom. McGraw-Hill, 1999.
These are just a few of the most popular trading books to read, which may help you discover new trading ideas and methods. However, it’s not enough to have the knowledge: it’s equally important to get some practice and test different methods and tools. Keep in mind that no one instrument or approach can guarantee success, so it’s up to the individual trader to choose their path, relevant tools and efficient risk management practices.
