It’s about time I updated my list of best trading books so here is my selection of the 100 greatest trading and investing books of all time.

I’ve read (or at least partly read) a lot of these and I’ve tried to put them in some sort of order as well. Not an easy task but see what you think.

If you have any suggestions for other trading books, please leave them in the comments. You can never have too many book recommendations.

100 – The Millionaire Next Door

The emphasis from this book is that anyone with a steady job can build up wealth by focussing on some simple investment practices. This book reveals the stories of ‘everyday’ millionaires. It’s about ordinary Americans who are getting rich by living below their means and investing well.

Amazon score: 4.4

99 – Time Series Analysis

Time series analysis involves analyzing time series data in order to extract meaningful statistics and other characteristics which can then be used to make forecasts.

Traders calls this trading the trend. Economists call is time series analysis. This is the econometrics textbook version.

Amazon score: 4.5

98 – Animal Spirits

The term Animal Spirits was first popularised by Keynes. Shiller and Ackeroff take the concept further with their own philosophies regarding the behaviour of investors and their effects on financial markets. This is a good book for armchair economists but quite hard going for traders.

Amazon score: 3.8

97 – The Handbook of News Analytics in Finance

This book is basically a collection of short articles and research papers. Not that exciting you might think but as a complilation it serves as a useful source of new trading ideas for quants looking to incorporate news or sentiment analysis into trading signals.

For example, one section of the book shows a strategy that earns abnormal returns by going long stocks with extreme positive sentiment scores and short stocks with extreme negative sentiment scores.

The hypothesis is that it takes market participants a long time to process large amounts of new information and quick traders can take advantage of this.

Amazon score: N/A

96 – A Concise Guide to Macroeconomics

I enjoyed this little guide to macroeconomics. It’s short, to the point and well written. It explains top down factors such as unemployment, GDP and the current account.

If you are looking for an introduction to macroeconomics this is a decent first book written by Harvard Business School professor David Moss.

Amazon score: 4.2

95 – Rich Dad Poor Dad

This is a classic personal finance book that has stood the test of time since it was published in 1997. The book stresses the importance of owning assets and having them work for you instead of the other way around.

Amazon score: 4.6

94 – Narrative and Numbers: The Value of Stories in Business

Aswath Damodaran is a Professor of Finance at the Stern School of Business where he teaches corporate finance and equity valuation. He also writes a popular blog where he dissects company accounts and makes a best guess at valuation.

This book looks at two main factors that drive company valuations. The numbers (quantitative) and the narrative (qualitative). You need both factors to make a good investment.

Amazon score: 4.3

93 – Cycle Analytics for Traders

This book serves as an introduction to digital signal processing methods that can be used in the creation of technical trading models. Ehlers explains how to use several of his unique filters, cycles and indicators. He also provides Easy Language code for download.

Amazon score: 4.3

92 – Global Asset Allocation

Global Asset Allocation by Meb Faber is short, not expensive and worth reading.

A key insight from the book is that when you compare a selection of the most popular asset allocation schemes (eg. 60/40, Dailo’s all weather portfolio, El-Arian, Buffett etc.) there is surprisingly little difference in returns after a long period such as 40 years. It doesn’t matter too much which approach you take, it simply matters that you invest.

Amazon score: 4.5

91 – New Trader Rich Trader

Steve Burns is a stock trader from the US who takes a no-nonsense and straight forward approach to the markets, refusing to become flustered by the latest news and trends. Steve trades simply, with common sense and discipline, and he does it well.

Steve is also one of the most followed traders on Twitter and has written a number of educational books. This one is a great introduction into trading with solid steps for beginners.

Amazon score: 4.3

90 – Secrets For Profiting in Bull and Bear Markets

A classic book from the 1980s that talks about stage analysis and trading the trend. Not sure how well these methods would work today but the book provides good ideas for trend followers.

One piece of advice from the book I do agree with – never buy a stock after it goes up on good news, especially if it had a run up prior to the event.

Amazon score: 4.7

89 – Statistically Sound Machine Learning for Algorithmic Trading of Financial Instruments

From respected author David Aronson, this book gives details on how to create and test predictive models for any market type. Most of the work is done using a free software called TSSB.

TSSB requires learning its associated command line language and some time investment is needed to learn the software. However, the language is supposedly not too difficult to learn. So this is a way to get involved in machine learning for trading.

Amazon score: 3.9

88 – Traders of the New Era Expanded

In a similar style to the Market Wizards books but with an emphasis on everyday type traders who are working at home and plying their craft as day traders.

Despite the difficulties of modern markets this book shows some traders are still having success and the book provides lots of useful advice and ideas.

Amazon score: 4.1

87 – Berkshire Hathaway – Letters To Shareholders

This book serves as a compilaton of Warren Buffett’s legendary shareholder letters from 1965-2014 and they speak volumes of Buffett’s approach and style.

The same letters can be freely read online by visting the Berkshire Hathaway website. However, the high ratings of this book show that there is still value in purchasing this compendium.

Amazon score: 4.7

86 – Laughing at Wall Street

Laughing at Wall Street details how small time investor Chris Camillo turned $20,000 into over $2 million in just a few years. And he did it by reading tabloids, shopping at the mall and connecting on Facebook. He also managed to create a system that got out of the stocks just as they were discovered by Wall Street.

I dont think many have read this one but it’s a good one for the regular investor and shows why it’s important to be original.

Amazon score: 4.3

85 – The Poker Face of Wall Street

Aaron Brown is a highly respected risk manager who also works for the hedge fund AQR Capital Management.

This book combines elements of markets and elements of poker and illustrates how to embrace and evaluate financial risk. Brown is one of the best at talking and writing about risk so that even the layman can understand.

Amazon score: 3.4

84 – Misbehaving: The Making of Behavioral Economics

The author of Misbehaving, Richard Thaler, recently won the nobel prize for his work on behavioural economics. This book talks about the irrationality of investors and consumers and gives an account of some of the authors academic research.

But Thaler is not just an armchair academic. He also advises an investment fund that has more than doubled the return on the S&P 500 over the last few years.

Amazon score: 4.4

83 – Manias, Panics, and Crashes: A History of Financial Crises

Not the most casual or flowing read but this book gives a detailed account of many financial crashes and manias starting with the South Pacific bubble in the 18th century.

As the saying goes ‘history doesn’t repeat itself but it does rhyme’ so this book can help you to spot the similarities of major events and how investors get caught up in euphoria and panic.

Amazon score: 3.8

82 – The Most Important Thing Illuminated

This book is fairly unique in that it reads as a collection of business memos written by famed investor Howard Marks. Marks is a celebrated value investor and this book showcases numerous tidbits of wisdom. For example, the importance of second level thinking, the use of ratios and the 18 things to look for in a stock.

Amazon score: 4.5

81 – Calculated Bets: Computers, Gambling, and Mathematical Modeling to Win

Steven Skiena, a jai-alai enthusiast and computer scientist, documents how he used computer simulations and modeling techniques to predict the outcome of jai-alai matches and increase his initial stake by 544% in one year.

Although this book talks about gambling and the obscure game of jai-alai, there are obvious implications for traders looking to build their own profitable betting systems.

Amazon score: 4.4

80 – The Research Driven Investor

Written by Timothy Hayes of Ned Davis Research this book provides lots of inspiration for investors and quants. The book details how to build composite indicators that can be used to predict broad market turning points and trends. Some of the models are based on more than 100 years of data. The book also contains stock screens and strategies for small caps.

Lots of charts, stats and examples are given which makes this a good book for researchers. It was published in 2001 which means there’s lots of data available to evaluate how the strategies have performed since.

Amazon score: 5.0

79 – Systematic Trading: A unique new method for designing trading and investing systems

Rob Carver worked as a portfolio manager for AHL, one of the world’s largest systematic hedge funds. This is a solid book written by someone with skin in the game.

Carver places a strong emphasis on money management and also explores asset allocation. Practical examples from the UK, USA and international markets give the book a global feel.

Amazon score: 4.2

78 – The Kelly Capital Growth Investment Criterion

When it comes to money management techniques there are numerous options available. But there is only one that has been embraced and recommended by some of the biggest investors of our time including Warren Buffett, Ray Dalio and Ed Thorp. I’m talking about the Kelly Formula.

This is the definitive text on the Kelly formula, a robust and scientific method for maximising the return on your trades and investments. Not an easy read but simply understanding the concept of Kelly will pay dividends. Note the Amazon review from Nassim Taleb.

Amazon score: 3.8

77 – The Signal and the Noise: Why So Many Predictions Fail – but Some Don’t

This book comes from the founder of the highly regarded FiveThiryEight blog. It’s a book about stats, noisy data and prediction. It draws parallels to other books on prediction such as Superforecasting and Thinking Fast and Slow.

It shows most people have a poor understanding of probability and uncertainty. This is why so many predictions fail and this book helps the reader address those flaws with lots of reasoned evidence and examples.

Amazon score: 4.4

76 – The Little Book That Still Beats the Market

Joel Greenblatt is manager of Gotham Capital, a value focussed hedge fund which produced annualised returns over 40%.

Greenblatt talks about his Magic Formula for investing which is a simple nine rule strategy for selecting value stocks. The approach is similar to other value investors like Ben Graham and is also similar to my own value screen.

According to Greenblatt, the formula beats the S&P 500 over 95% of the time. Most analysis I’ve seen shows that the formula does do a good job, at least on historical data.

Amazon score: 4.1

75 – What Works on Wall Street

What Works on Wall Street contains objective statistics on investment strategies going back as far as 1926. A large component of the book is the analysis of various stock screens and fundamental type strategies.

For example, strategies based on financial ratios like price to earnings, price to sales, cash flow, market cap as well as some technical rules. I like a book that is full of stats and ideas and this book has plenty of both.

Amazon score: 4.3

74 – Pit Bull: Lessons from Wall Street’s Champion Day Trader

Pit Bull is the story of legendary trader Marty Schwartz aka Buzzy. After quitting his job as financial analyst, Schwartz turned to trading, making $600k in his first year and $1.2 million in the next using a get-in-quick, get-out-quick style.

The book emphasises hard work, determination, technical analysis and risk management. This book doesn’t reveal too many secrets but gives a fascinating account of his progress.

Amazon score: 4.3

73 – More Money Than God: Hedge Funds and the Making of a New Elite

This book looks at the history of the hedge fund and the evolution of certain financial products. It looks at different hedge fund styles, the secrecy surrounding them and their eventual blow ups. Well regarded book that deserves its place on any list of best trading books.

Amazon score: 4.5

72 – Unholy Grails – A New Road to Wealth

Nick Radge has been trading for over 30 years and this book details a number of strategies for picking stocks. The emphasis is on momentum investing in the Australian share market and Nick provides the rules and results of some simple systems.

These systems can be easily applied to other stock markets and the book gives advice for how to do so and also how to backtest correctly.

Amazon score: 4.2

71 – Finding the Next Starbucks: How to Identify and Invest in the Hot Stocks of Tomorrow

Michael Moe is an analyst and founder of GSV Capital. He was one of the first analysts to tip Starbucks after it’s IPO and he found success with his own unique style of growth investing. This book serves as a guide for finding similar mega winners as Starbucks, Apple, Netflix etc and finding them early.

Amazon score: 3.7

70 – Short-term Strategies That Work

Short-term Strategies That Work details a number of simple quantitative strategies with backtest results provided.

Although the book is a bit rough around the edges I tested some of these ideas on my own and found that many of them have held up well since publication. Most of the strategies are based on the concept of mean reversion and are easily programmable.

Amazon score: 3.9

69 – The Education Of A Speculator

Victor Neiderhoffer is a legendary trader who used to work for George Soros. He’s an old school trader who combines instinct, courage and hard work. He’s had his ups and downs but trading is in his blood and this is evident to see from the book and his writings.

One Amazon review calls Niederhoffer our generations Jesse Livermore. Quote well put I think.

Amazon score: 3.7

68 – Superforecasting: The Art and Science of Prediction

Most people will tell you that it is impossible to predict the future so there is no point in trying.

But Tetlock and Gardner show that there is in fact a group of people (called superforecasters) who excel at being able to make very specific and accurate predictions. These are ordinary people from all different backgrounds but they do share some common characteristics.

The book reveals those characteristics and the science to making more accurate forecasts. I really enjoyed this book and the implications it has for making smarter bets in the markets.

Amazon score: 4.3

67 – Algorithmic Trading and DMA

This book from Barry Johnson goes where many quant books don’t in that it covers some interesting ground in the shape of direct market access strategies and market microstructure.

It looks at details such as order types, transaction costs and execution. And it explains algorithms such as VWAP, TWAP, market impact and others.

This book is nearly 600 pages and provides advanced information with a scientific feel and lots of stats and tables.

Amazon score: 4.1

66 – Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market

If you are involved in the financial markets and not concerned about the wave of artificial intelligence, machine learning and bots entering the realm, maybe should be. And maybe you should read this book to get a better understanding of its impact.

Markets never stay the same for long so if you cannot beat them you must join them. A good book to read after Flash Boys by Michael Lewis.

Amazon score: 4.5

65 – The Art and Science of Technical Analysis

Adam Grimes is an experienced trader and founder of Waverly Advisors LLC who knows what it’s like to struggle as a retail trader and also succeed as a professional.

Grimes suggests that markets are random a lot of the time but not all the time. And this book is unique in that it addresses scientific questions that arise from the voodoo nature of some technical analysis.

Basically, this is a book that will debunk certain methods while provide interesting evidence of others.

Amazon score: 4.6

64 – The Wolf Of Wall Street

The story of Jordan Belfort and his fraudulent investment business Stratton Oakmont. You have probably seen the film with Leanardo DiCaprio.

This book tells a lot about the murky world of penny stocks and boiler room operations that can be found under the surface. Just because of that, it’s a worthwhile read.

Amazon score: 4.0

63 – Options as a Strategic Investment

Over 1,000 pages long, this book is a very good reference for options trading. Calls, puts, verticals, strangles, straddles it’s all covered here. Get yourself a copy and stick it on your trading desk.

Amazon score: 4.4

62 – Trading Systems: A New Approach to System Development and Portfolio Optimisation

There are three parts to this book from Emilio Tomasini. The first focusses on system development and evaluation. The second details a step by step process for creating a system. And the third is all about combining different systems together in order to form a robust portfolio of strategies. The third part is particularly useful and unique and I always like finding a book that includes useable code.

Amazon score: 4.3

61 – Great Investment Ideas

William T Ziemba is an academic, fund manager and authority on market anomalies. He’s also worked with fellow trader Ed Thorp.

Ziemba has popularised and profited from many seasonal effects over the years and even written about them publicly. This book is a collection of journals and the organisation ends up being a bit messy. But the ideas and strategies inside are valuable stock investors.

Amazon score: N/A

60 – Margin of Safety

When Margin of Safety by hedge fund manager Seth Klarman was first published it was a commercial flop. Lack of advertising and editorial direction meant the book only sold a few thousand copies and was forgotten.

Except it wasn’t. The book started to gain traction and notoriety as hard to find copies were said to be changing hands for upwards of $2,000. The contents of the book are said to give clear, practical lessons on Klarman’s value investing style. But good luck finding a copy.

Amazon score: 3.4

59 – Buffett: The Making of an American Capitalist

Writer Roger Lowenstein spent three years with Buffett and his family in order to paint this fascinating portrayal of the master investor. The book tells the journey of Buffett from disciple of Ben Graham through to the man he is today (or at least who he was in 2008).

One of the best books not only as a biography of Buffett but with great detail about his strategy and method of investing.

Amazon score: 4.8

58 – Irrational Exuberance

Professor Shiller excels in his analysis of the state of markets and in the realm of ‘serious’ economics.

Shortly before the dotcom bubble he warned of stock market exuberance and shortly before 2008 he warned of a housing bubble. His knowledge and expertise make this an insightful book for fundamental investors and macro enthusiasts.

Amazon score: 4.3

57 – Dynamic Hedging: Managing Vanilla and Exotic Options

Highly regarded book among traders. The book is about derivatives, risk and options and you can see the beginnings of fooled by randomness. Not a book for beginners but one of importance.

Amazon score: 4.3

56 – Moneyball: The Art of Winning an Unfair Game

Moneyball is about the search for the holy grail in baseball. It’s the story of one coach and one lower league team and how they won so many games despite lack of resources.

The book shows how numbers and data can trump human intuition and be used to overcome the odds. There are clear implications for traders and investors through the use of financial data. The film is good too.

Amazon score: 4.6

55 – Stock Picking For Profit

This is not a very well known book. However, Simon Thompson is a respected analyst from Investors Chronicle in the UK and this book shows how he goes about selecting stocks.

The book covers aspects such as takeover plays, merger arbitrage, insider transactions and technical analysis. Not a well known book but one of my favourites.

Amazon score: N/A

54 – Principles: Life and Work

Ray Dalio isn’t your typical Wall Street trader. But he managed to build a large fortune and did so largely with the help of algorithms and a set of guiding principles.

I must admit I ended up skipping through a lot of this book because it’s over 500 pages and I had already read Mr. Dalio’s principles from a PDF he created for Bridgewater.

There is less info about investing than I would like but this is still a very useful book that contains some powerful ideas. For example, the economic machine and the importance of building your own individual machine.

Amazon score: 4.5

53 – The Little Book of Common Sense Investing

John Bogle is the founder of the Vanguard group and practically invented index fund investing.

There are numerous books out there that claim to help you beat the market but the title of this book says it all. The only way to GUARANTEE results is to invest sensibly into a diversified portfolio and hold long term. Good investing can be that simple.

Amazon score: 4.6

52 – Poor Charlie’s Almanack

Over 500 pages of wisdom from Warren Buffett’s right hand man, Charlie Munger.

Munger must be one of the smartest guys in the world so you know you will get a lot of value from this book. He talks about human biases, the need to read every day, why you should avoid self pity at all costs and lots more.

Amazon score: 4.7

51 – Mastering the Trade

Mastering the trade by John Carter is a useful book for day traders and swing traders. The author reveals the mistakes he made which you can learn from and goes through lots of his favourite setups with good explanation. He also talks about risk and advises to be careful holding positions overnight.

The book lacks some science and could do with more evidence to show the setups are worth taking but it’s still a good book for traders.

Amazon score: 4.3

50 – Dual Momentum Investing: An Innovative Strategy for Higher Returns with Lower Risk

Dr. Gary Antonacci analysed over 200 years of market history to come up with his dual momentum investing strategy. It is a simple and straightforward strategy but one that has shown robust performance and has received a lot of praise from within the industry.

This is a strategy that can be used in conjunction with, or as an alternative to buy and hold. The goal is to avoid bear markets while achieving higher returns with less downside.

Amazon score: 4.8

49 – Fortune’s Formula

Fortune’s Formula is a study of the connections between seemingly unrelated topics as gambling, information theory, stock investing, and applied mathematics.

Ultimately the story is all about the Kelly Formula and it’s success at the casinos, racetracks and trading desks.

Amazon score: 4.3

48 – Adventure Capitalist

Jim Rogers co-founded the Quantum Fund with George Soros and retired from Wall Street by the age of 37. In this book, he circumnavigates the globe in a bright yellow custom built Mercedes Benz.

As he travels the world you learn what Rogers looks for in his investments and how he likes to go against the crowd. Rogers has a number of books such as Hot Commodities and Street Smarts but this is probably my favourite. A great combination of travel and investing.

Amazon score: 4.3

47 – The Evaluation and Optimization of Trading Strategies

Updated in 2008, this book serves as a good introduction and roadmap for system developers. The author, Robert Pardo, is an expert in this domain and is credited as the first person to introduce the walk forward analysis method.

Amazon score: 3.8

46 – A Complete Guide to the Futures Market

Not only is Jack Schwager responsible for the Market Wizards series but he has also put together this comprehensive guide to the futures markets with help from Mark etzkorn.

At over 700 pages, this book packs information and was originally printed on wafer thin paper to keep down cost. It has since been reprinted on better quality materials and is receiving much higher reviews because of it.

Basically, this is a solid compendium that can sit on any traders desk.

Amazon score: 4.1

45 – The Misbehavior of Markets: A Fractal View of Financial Turbulence

Benoit Mandelbrot is a genius mathematician who invented fractal geometry. Fractals can describe things that no matter how close you look, never get simpler. Like the branches of cauliflowers, jagged coastlines or financial markets.

In this book, Mandelbrot seeks to challenge the assumptions of traditional financial theory. A key point is that if you use a standard normal distribution (gaussian) you will always underestimate the probability of rare events. This explains why seemingly rare events happen with much more regularity (in markets) that you would expect.

Amazon score: 4.1

44 – Trade Like a Stock Market Wizard

Investing champion and market wizard Mark Minervini achieved a 33,500% compounded return with his SEPA system that draws parallels with O’Neill’s CANSLIM method. The high returns and equally high reviews show how much of an effect this book has had on the trading community.

Amazon score: 4.5

43 – Flash Boys

Flash Boys caused a lot of controversy and some headaches on Wall Street when it was published in 2015. The book casts a critical eye on high frequency trading and highlights the unfair advantage that some elite firms are exploiting – to the detriment of the average investor.

Lewis argues that firms are actively engaging in the illegal act of front running in order to make easy profits. This set up is made easier by the complicated and fragmented nature of US stock exchanges.

Amazon score: 4.5

42 – Buffettology

There are numerous books that try to explain Warren Buffett’s investment style but I find Buffetology to be one of the clearest and easiest to read.

Put together by his former daughter-in-law, Mary Buffett, this book is a great introduction to Buffet’s style. It’s straight forward with several examples included to better understand the types of stocks Buffett likes.

Amazon score: 4.1

41 – The Commitments of Traders Bible

The Commitment of Traders report is published by the CFTC evey week in a bid to add transparency and level the playing field for futures and commodity traders. This is a totally free report that you should be reviewing if you intend to trade commodities.

If you have struggled in the past to get the most out of the COT report then this book wil give you guidance.

Amazon score: 4.5

40 – Beyond Technical Analysis: How to Develop and Implement a Winning Trading System

I remember reading this book by Tushar Chande many years ago and gaining a lot of insight from it. It’s mostly a book about technical indicators and using them to build trading systems.

Very useful for coming up with new trading ideas which you can then backtest or try out in the market later. The author is well versed in the technical aspects of trading and has created a number of unique indicators as well. For example, Chande Momentum Oscillator (CMO).

Amazon score: 4.1

39 – Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street

There are three types of edge according to author Sheelah Kolhatkar.

White edge, which is public information that anyone can use. Gray edge, which is not proprietary but available only to certain people in certain circles. And then there is black edge which is proprietary, market moving and illegal.

This book focusses on hedge fund SAC Capital, founder Steve Cohen and the dubious black edge methods the company used to get ahead and make millions. According to one Amazon review “this is a gripping account of a colossal insider trading scandal.”

Amazon score: 4.5

38 – Daily Trading Coach

Brett Steenbarger is a respected trading coach who works with many successful traders and hedge funds.

This book is about giving you the tools that you can use to improve your own trading in your own time. It emphasises the importance of viewing trading as a business and contains solid advice that can be adhered to and repeated on a daily basis.

This is the kind of book that resonates well with real traders who understand the difficulties of learning to trade and mastering the mental process of trading. It’s an easy to grasp book, a useful read and suitable for all levels.

Amazon score: 4.6

37 – Common Stocks and Uncommon Profits and Other Writings

Born in 1907, Philip Fisher is one of the most influential and admired stock investors of all time and this book introduces the reader to his investment philosophies.

Fisher was primarily a value investor and he also introduced the ‘scuttlebut method’. This is where you spend time speaking with people who have in-depth knowledge of the company you are analysing.

For example, Fisher would speak to management, staff, other shareholders, anyone who might have an interesting viewpoint. Buffett is known to have been heavily influenced by Fisher.

Amazon score: 4.4

36 – Long-Term Secrets to Short-Term Trading

First published in 1999, this is a good introduction for new traders from experienced trader Larry Williams.

The book drills down on all the important principles for more both beginners and advanced traders and has some interesting ideas.

Larry Williams is well known within investment circles and writes well. Some of the concepts are basic but they are all important and directly applicable for the task of day trading and swing trading.

Amazon score: 3.9

35 – Following The Trend

Michael Covel may have written the bible on trend following but hedge fund manager Andreas Clenow has written the manual. This book is unique in that it lays out what is needed to execute a hedge fund quality trend following strategy for futures.

The book covers a lot of the details and shows what to expect when trading such a strategy by giving a month by month summary of trading results.

Amazon score: 4.6

34 – The New Money Management

Money management is one of the most important components of successful trading. In The New Money Management, Ralph Vince, gives his own take on the subject including coverage of ‘optimal f’ and ‘risk of ruin’.

This book is advanced but highly regarded and one of the most useful I have read on the subject of money management.

Amazon score: 4.1

33 – Quantitative Trading Systems

This book by Dr Howard Bandy is one of my most thumbed over books because it contains so many useful ideas and nuggets of information. I have used it so much it is falling apart. The book includes the stats and Amibroker code for a number of trading systems which gives this book additional value.

Bandy’s other books are also well worth reading especially Quantitative Technical Analysis which is like an updated version of QTS. So it may be worth getting that one first. Mean Reversion Trading Systems is also good.

Amazon score: 4.3

32 – Value Investing

I’ve not read this one but it’s highly rated and I’ve heard good things. Bruce Greenwald is one of the leading authorities on value investing and some of the savviest people on Wall Street have taken his Columbia Business School course on the subject. So this is a book that offers modern insight into value investing and provides a lot of clarity for practitioners.

Amazon score: 4.3

31 – The Art of Short Selling

This book from Kathryn Stanley is regarded as one of the best available on the topic of short selling. It focusses on finding the fundamental flaws in a business that can help you avoid losing investments and profit from falling ones. Includes details on financial statement analysis, ratios and provides lots of examples to work through.

Amazon score: 3.8

30 – MONEY Master The Game

Self help guru Tony Robbins isn’t the first person you would expect to write a book on investing but he does a great job with this book that comes in at almost 700 pages. The book includes interviews with well known names such as Carl Icahn, Warren Buffett and Ray Dalio and focusses on the simple steps to invest well and get compounding to work on your side.

Amazon score: 4.4

29 – Technical Analysis of the Financial Markets

First published in 1999, this book is widely regarded as the bible of technical analysis. 576 pages of charts and indicators make this an excellent reference guide.

Amazon score: 4.6

28 – The Alchemy of Finance

Soros is arguably the greatest trader of our time and this book gives useful insights into the mind of ‘the man who moves markets’.

Soros’s books are not always easy to read but they should be read anyway for the lessons they reveal. Of particular importance is Soros’s theory of reflexivity which governs the way he makes investment decisions.

Amazon score: 4.0

27 – How I Made $2,000,000 in the Stock Market

Nicolas Darvas fled Hungary and worked as a dancer in Turkey after the second world war. He began to invest in the stock market in his spare time using telegram to send stock orders.

After many failures he eventually came across a ‘box’ trend trading system that allowed him to build a large fortune. This classic book tells the story.

Amazon score: 4.4

26 – Encyclopedia of Chart Patterns

In this book Thomas Bulkowski takes on the commendable task of cataloguing numerous chart patterns and providing backtest statistics in order to evaluate the effectiveness of those patterns.

Although some questions relating to test methods are left unanswered this book offers over 1,000 pages of charts, statistics and guidance to help the average trader. A worthwhile investment and reference guide.

Amazon score: 4.3

25 – Quantitative Trading: How to Build Your Own Algorithmic Trading Business

Dr. Ernie Chan has written a number of useful books for traders including Algorithmic Trading, Machine Trading and this one.

Quantitative Trading is geared towards the retail trader who wants to get into algorithmic trading and also details a number of promising strategies with included statistics and code. Chan is extremely knowledgeable and this is a good first book for a beginner system trader.

Amazon score: 3.4

24 – Inside the Black Box: The Simple Truth About Quantitative Trading

This book comes from a highly experienced author who understands numerous advanced topics to do with HFT such as data cleaning, machine learning and financial theory. It does not talk about individual strategies or rules but rather the framework with which to tackle quant trading and how to evaluate quant trading firms.

Amazon score: 3.9

23 – Trend Following: How to Make a Fortune in Bull, Bear, and Black Swan Markets

Michael Covel has written the bible on trend following with this 688 page updated version of the original. The book talks about trend following principles and practitioners and details hedge fund performances. If you are new to trend trading this is the perfect book to get started with.

Amazon score: 4.4

22 – Japanese Candlestick Charting Techniques

Whether or not you believe in technical analysis, candlestick charts are the most popular way to display financial data and this is the definitive book from Steve Nison.

Packed with charts and examples, this book will have you up to speed with morning stars, dojis and hammers.

Amazon score: 4.5

21 – Trading and Exchanges: Market Microstructure for Practitioners

This is an important book for traders because it details the actual infrastructure that traders must deal with if they want to play the game.

Former Chief Executive of the SEC, Larry Harris talks about different market participants, transaction costs, regulations and rules. Vital information for every trader.

Amazon score: 4.4

20 – The Big Short: Inside the Doomsday Machine

Another bestseller from Michael Lewis that got turned into a Hollywood blockbuster. This book tells the real story of the 2008 crash and goes after a handful of investors who got rich from the crash.

Amazon score: 4.6

19 – Building Winning Algorithmic Trading Systems

Professional trader Kevin Davey is an algorithmic futures trader and this book lays out his process for creating, testing and trading his strategies.

This is a great first book because it is authentic but not too difficult for the average trader.

A stand out quote from the book is not to pay attention to in-sample or out-of-sample results as they are usually biased. Davey prefers to use walk forward, monte carlo and incubation methods to evaluate his systems.

Amazon score: 4.4

18 – One Up On Wall Street

Legendary investor Peter Lynch is convinced that everyone has what it takes to beat the street.

According to the former Fidelity money manager, the average person is sitting on numerous investing edges that Wall Street doesn’t know about. Investors must simply use what they know to get in early and find the ten and twenty baggers. This is a great book on investing from a legitimate market guru and it contains fundamental wisdom, much of which seems like common sense.

Amazon score: 4.4

17 – Trading in the Zone

Trading in the Zone is not about strategies but about the concept of trading and the psychological mindset that is needed to succeed.

Mark Douglas teaches how traders can get comfortable with random outcomes and the loss of control that comes through trading probabilities. This book is not for everyone but if mindset is your biggest problem this is a good choice.

Amazon score: 4.5

16 – One Good Trade

One Good Trade is written by Mike Bellafiore the founder of prop trading firm SMB Capital.

A central concept from the book is the need to wait for high probability setups and only ever trade the stocks in play.

Stocks in play are those stocks in the news that are moving faster and further than any others. These stocks offer the best (and arguably easiest) opportunities for day traders to make a profit.

An excellent book, particularly for beginners and struggling day traders.

Amazon score: 4.2

15 – How to Make Money in Stocks

William O’Neill founded Investor Business Daily and this book details his CANSLIM investing approach which can be best described as a method for finding high return growth stocks.

The acronym stands for Current quaterly earnings, Annual earnings, the New factor, Supply and demand, Leader vs. Laggard, Institutional support and Market direction.

The book is filled with charts and suggestions for how to find those high returning picks. The IBD leaders strategy has now been turned into an ETF with ticker symbol FFTY.

Amazon score: 4.4

14 – Evidence-Based Technical Analysis

David Aronson is both a professor of finance and a former prop trader which makes him a rare breed of both science and ‘street’. This book details two methods traders can use to evaluate their trading strategies and make sure they’re not random. Monte Carlo and White’s Reality Check.

Aronson dispels some myths surrounding technical analysis and then tests 6,402 trading signals on the S&P 500. One of the best trading books for system traders.

Amazon score: 4.0

13 – Extraordinary Popular Delusions and The Madness of Crowds

Charles MacKay’s classic book was first published in 1841 but retains its allure for its portrayal of bubbles and manias. After reading this you’ll have a better understanding of how economic bubbles happen and why they really are nothing new.

Amazon score: 4.0

12 – Trading Systems And Methods

It was Perry Kaufman who first persuaded me that trading systems are crucial if you have difficulty holding on to your trades or with the emotional side of trading. This is one of the classic books for system traders that is heavily filled with system ideas, stats and tips for creating new trading strategies.

Amazon score: 4.1

11 – When Genius Failed

When Genius Failed is the story of hedge fund Long Term Capital Management which blew up in 1998 and almost took the financial system with it.

Founded by bond trader John Merriweather, LTCM included two nobel prize winning economists and numerous other Wall Street experts. The fund started off on a tear but when markets in Indonesia, South America and Russia crashed, LTCM went into meltdown. This is a book that highlights topics of overconfidence, risk management and black swans.

Amazon score: 4.5

10 – Trade Your Way To Financial Freedom

Van Tharp has been in the markets since 1982. Having coached numerous individual traders, he is regarded as an authority on trader psychology and risk management.

This is a comprehensive book that describes his approach, details lots of useful techniques and analogies and details how to build a trading plan. Not always easy to digest but a good book for beginners with strong guidance on money management and better than the title suggests.

Amazon score: 4.3

9 – Incerto

Incerto comprises four books from Nassim Taleb; The Black Swan, Fooled By Randomness, Antifragile and The Bed of Procrustes. All great books.

Former options trader Taleb has been called the sharpest thinker in the world today. His ideas are original and highly applicable to investors. Particularly The Black Swan, which reveals how surprise events impact the world and are rationalised with hindsight.

Taleb generates some controversy with his no-nonsense approach and social media jibes but that is no reason to not read his books. I like his sense of humour.

Amazon score: 4.0

8 – Thinking Fast And Slow

Thinking Fast and Slow is very much the lifes work of nobel prize winning economist Danny Kahnemann. This is a book that reveals some incredible insights into human behaviour, intuition and how our minds work.

At its heart, the book reveals that many of our decisions and thought processes are illogical. Concepts such as loss aversion, overconfidence and regression to the mean can easily be applied to the world of trading which makes this book a must read for all investors.

Amazon score: 4.5

7 – The Complete Turtle Trader

The legendary Turtle Trader experiment began in 1983 when Richard Dennis bet that he could turn an ordinary group of strangers into profitable traders simply by teaching them to follow the rules of a basic trend following strategy.

This book from Michael Covel follows the story of 23 novice traders who are taught a simple system and let loose in the market with $1 million dollars of Dennis’ money.

Amazon score: 4.3

6 – A Random Walk Down Wall Street

First published in 1973 this is a classic book from Princeton Economist Burton Malkiel that serves as a defense of the efficient market theory. The book criticises technical analysis and suggests there is no such thing as a free lunch in the investment world.

However, it should be noted that the author does not take the purist view of efficient markets. Malkiel says there are inefficiences available and some strategies are even talked about in the book. The problem is that most inefficiencies are difficult to take advantage of. But this is another must read book for investors.

Amazon score: 4.6

5 – The Intelligent Investor

This is the classic investment tome from Benjamin Graham that Warren Buffett called “By far the best book on investing ever written”.

The Intelligent Investor starts off with an important warning about expectations and proceeds to give rounded advice for two types of investor; defensive and enterprising.

Filled with timeless wisdom on how to invest in a business-like fashion. Buffett cites the chapters on Mr. Market and margin of safety as the most important.

Amazon score: 4.5

4 – Liar’s Poker

Liar’s Poker is a semi autobiographical account that follows author Michael Lewis as a bond salesmen during the late 1980’s. Published in 1989, this is a classic Wall Street book that put Lewis on the map as a financial writer. The book paints a unique, unflattering picture of what it was to work on Wall Street at the time.

Amazon score: 4.4

3 – A Man For All Markets

When it comes to trading legends, Ed Thorp is the real deal.

He invented card counting for blackjack, built one of the first wearable devices (used for defeating roulette tables) and pioneered one of the world’s first hedge funds.

Thorp’s hedge fund Princetown Newport Partners went for around 20 years with only three losing months. It did so using a arbitrage strategy based around options pricing. If it wasn’t for a scandal in 1989 (which Thorp played no part in) the fund might have become even more legendary.

If you are looking for a great trading story you will definitely get it with this book. Really enjoyable and inspiring read from the master.

Amazon score: 4.3

2 – Reminiscences of a Stock Operator

This is the classic book from Edwin Lefevre that tells the story of Jesse Livermore.

Also known as ‘boy plunger’, ‘boy wonder’ and ‘great bear of Wall Street’, Jesse is considered to be one of the best traders of all time, winning and losing many millions of dollars during the Great Depression and surrounding years.

Although the Jesse Livermore story ultimately has a sad ending, this classic book provides many timeless lessons and advice that is still applicable today.

Livermore was a true trader who read the tape and who has inspired countless others.

Educational and highly entertaining, Reminiscences of a Stock Operator has stood the test of time and been recommended by countless trading giants as well. Even Alan Greenspan recommended this book.

Amazon score: 4.4

1 – Market Wizards Series

There are hundreds of trading books out there but there are only two that get frequently mentioned as being the best trading books of all time. The first is Reminiscencs of a Stock Operator (above) and the other is Market Wizards by Jack Schwager.

The original Market Wizards was published in 1989 and contained interviews with some of the world’s best traders such as Ed Seykota, Bruce Kovner, Michael Marcus and Paul Tudor Jones.

I remember first reading Market Wizards while working as a day trader. It helped me immensely and it remains one of my all-time favourites.

Following the success of the original, Schwager has gone on to produce many more books in the Market Wizards series such as New Market Wizards, Hedge Fund Market Wizards and Stock Market Wizards.

These are all good books and there are no better books available for traders than this collection which is why I’ve clumped them all together as number one.

Amazon score: 4.5