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Top 10 "Must Have" Trading Books
Posted: March 28, 2003 9:00 A.M. PT
by Jaye Abbate

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Click here to subscribe!All the new investing fads have unleashed a torrent of new trading books. Whether it's the online investing revolution, the day-trading phenomenon or the IPO craze, new books promise the secrets to trading riches. But a group of 10 books -- some recently released, others dating back decades -- should be on every investor's bookshelf. These are not just best-selling books, but titles a consensus of experts agrees are the most valuable, most important for developing the skills and attitudes needed to succeed in the market, whether you're an experienced trader or a casual investor.

Listed in no particular order here, these 10 titles include both hands-on, strategy-oriented guides and books that focus on theory, anecdotes and experiences most traders encounter.


1) New Market Wizards by Jack Schwager, a perennial classic, is in a class by itself. Schwager pioneered the "interview" format trading guide, selecting the best candidates, asking the right questions, paring down their answers into useful, easy-to-apply concepts and practices. He gets the top names in the field to reveal their personal techniques across a wide range of trading disciplines. This book makes a great read, whether you're an active or occasional trader.
2) The Disciplined Trader by Mark Douglas remains one of the best guides traders use to develop the focus, discipline and winning attitudes you need to succeed in the market, and it appears on the recommended reading list of virtually every major trader.
3) Along similar lines, Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay is a classic that explores the impact of crowd behavior on the markets -- from the tulip mania to the present mutual-fund mania -- exploring how to use crowd psychology to your investing advantage.
4) Trading for a Living by Alexander Elder is considered the trader's "handbook." Elder covers trading systems, methods, disciplines, money management -- virtually everything needed to become an accomplished trader.
5) Technical Analysis of Stock Trends by Edwards and Magee is written by the "grandfathers" of technical analysis. This popular work has just been completely overhauled, updated and revised for a 7th edition. Readers can't find a better reference guide to technical analysis.
6) Benjamin Graham explains his value-investing theories in The Intelligent Investor. Warren Buffett, Peter Lynch and other investing superstars have adopted his theories. He counseled investors with simple truths that are still valid today -- even in the face of the "dot com" and IPO craze. Still one of the most popular -- and one of the best -- investment books of all time.
7) Options as a Strategic Investment by Larry McMillan is a mammoth reference that's the top-selling options book of all time -- and for good reason. It's literally the "bible" of the industry -- and makes a great companion to his more recent, strategy-focused McMillan on Options bestseller.
8) Charting is the backbone of technical analysis, and consistently successful investors make chart analysis an active part of their investment strategy. Encyclopedia of Chart Patterns by Charles Bukowski is a thorough new book that covers every conceivable chart pattern in complete detail, and no one using technical analysis or starting out in charting should be without it.
9) The Trader's Tax Solution by Ted Tesser stands alone as the definitive book on tax strategies and implications for traders, revealing techniques for paying the least amount of taxes legally possible. Tesser exposes concepts most tax preparers don't even know and addresses the unique tax consequences traders routinely encounter. Just one "tip" can cover the cost of the book -- and save you thousands.
10) And finally-- generations of investors have benefited from Edwin LeFevre's Reminiscences of a Stock Operator, chronicling the trading adventures of Jesse Livermore, one of the greatest speculators ever. Jack Schwager's new introduction explains why legions of traders continue to cherish this book, and why it's required reading for employees at Wall Street's biggest firms. It's entertaining and readable, and investors of every stripe can relate to the roller coaster of emotions and events Livermore experienced. Above all, it illustrates that when it comes to market activity, the more things change, the more they stay the same.

These 10 books -- taken individually or as a group -- continue to be the best, most important sources for traders to develop their trading skills and acumen. All traders will do well to have any -- or all -- these titles form the core of their "trading" library.

Order any of these titles from the eSignal Bookstore.
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