BOOKS recommended by traders

Day Trading Tactics
Personal Management, Psychology
Mechanical Trading Systems
Money, Risk, Portfolio Management
Chart Analysis & Trading Strategies
How Markets Work: Options, Securities, Futures, Derivatives
Successful Traders
Reference Library, Tax information

Day Trading Tactics

Day Trading With Short Term Price Patterns and Opening Range Breakout, by Toby Crabel, 1990, $95

Discusses new, unique patterns for swing and day trading that have predictive power. Using a series of objective computer tested studies of price action and price patterns, author focusses on periods of little price activity alternating with periods of greater price movement, preparing you for the next trend.

Stock Trading Wizard: Advanced Short-Term Trading Strategies for Swing and Day Trading, by Tony Oz, 1999, $96

Covers the essential elements for short-term trading. Covers Technical Analysis, Level II Quotes, Advanced Order Execution Systems, Market Psychology, Trader's Psychology, Secrets to Successful Trading, Money Management, Stock Screening Formulas, and more.

Day Trading into the Millennium, by Michael Turner, 1998, $62

A comprehensive primer on day trading for newcomers. Chapters cover all aspects, including hardware and software. Concise -- only 230 pages.

The Electronic Day Trader, by Friedfertig, West, Piecznik; 1999, $35

Shows how to get direct access to NASDAQ through various electronic trading systems, how to execute orders on-line, utilize market maker information, and get instant quotes and executions.

How to Get Started in Active Trading and Investing, by David Nassar, 2004, $15

The author explains technical analysis patterns, and the financial psychology behind those patterns. He explains how supply and demand, and the human behavior of greed and fear create those patterns. An excellent primer.

The Day Trader's Advantage, by Howard Abell, 1996, $40

Shows how to trade taking into account real-time characteristics and psychology of its participants, conflicting market data, and ambiguous technical indicators. Also shows how to master the psychological aspects of day trading.

Personal Trading Skills, Psychology

Enhancing Trader Performance, by Brett N. Steenbarger, 2006

Steenbarger shows you how to transform talent into trading skill through a structured process of expertise development. It clearly has a bias which leans more toward the full-time and/or short-term trader. Excellent.

Your Money and Your Brain, by Jason Zweig, 2007

On the emerging field of Neuroeconomics, that combines psychology, economics and neuroscience. It's all about how your brain functions when making economic decisions, and why they can be so irrational. Why can't we execute trades that we had planned to do?

SFO Personal Investor Series: Psychology of Trading, by SFO MAgazine, 2007

Anthology of contributions from 25 top traders. Includes first-hand advice on managing performance anxiety, emotions and mind blocks.

Trading to Win: the Psychology of Mastering the Markets, by Ari Kiev, 1998

Set-by-step plan from a trader/psychiatrist to identify and change those emotional and behavioral traits that sabotage your trading success.

The Disciplined Trader: Developing Winnig Attitudes, by Mark Douglas, 1998

Contrasts the behaviors learned from society to those needed to trade successfully. Presents new ideas on discipline, responsibility and self-esteem and a step-by-step approach to mastering your emotions.

Trading for a Living: Psychology, Tactics and Money Management, by Alexander Elder, 1993

A trader/psychiatrist summarizes 3 primary skills: disciplining your mind and understanding crowd psychology, market analysis and trading methods, and managing your risk by locating entry and exit points.

Derrick Niederman, The Inner Game of Investing, John Wiley & Sons, 1999

Subtitled: Access the Power of Your Investment Personality. A lighthearted attempt to find your true investment personality. Despite the limits of all these types of exercises, readers are likely to see something of their own investment preferences in the seven portraits of investor behavior -- ranging from the skeptic to the bargain hunter to the adventurist -- and save themselves a good deal of grief.

Trading Without Fear: Eliminating Emotional Decisions with Arms Trading Strategies, Richard Arms, 1996

Author shows how not to succumb to fear and greed. Trading strategy emphasizes volume analysis for getting insight into the market's emotions. Also shows how to use Volume Adjusted Moving Averages (VAMA) and his Ease of Movement indicator. Author is the 1995 winner of the coveted Market Technicians Award.

It's When You Sell That Counts, Don Cassidy

Most investors have a tendency to hold on to a stock far longer than is profitable. The author reveals the hidden reasons we resist selling and offers survival tactics against ways investors rationalize their inaction.

Mechanical Trading Systems

Technical Traders Guide to Computer Analysis of the Futures Markets, 1991

With specific information on how to set up and use computer-generated technical studies of the most popular indicators, the book includes: How to build a trading system tailored to the reader's specific need; Practical instruction on how to display and analyze technical information; Advice for developing well disciplined money management and risk control strategies; techniques for monitoring a trading system to detect if something has gone wrong before major losses occur.

Cybernetic Trading Strategies : Developing a Profitable Trading System With State-Of-The-Art Technologies; by M. Ruggiero, 1997, $60

Instructions and applications on how to develop tradable market timing systems using neural networks, fuzzy logic, genetic algorithms, chaos theory, and machine induction methods. Very motivating for those with programming experience.

Computerized Trading: Maximizing Day Trading and Overnight Profits, edited by Mark Jurik, 1999, $40

20 authors write about each aspect of trading they know best. Topics include chart analysis, entering and exiting, strategy development and testing, money management, advanced market analysis and modeling, and a consumer's guide to finding the best data suppliers.

Trading Systems and Methods, by Perry Kaufman, 1998, $80

A comprehensive encyclopedia of new and traditional methods of technical analysis. A hands-on manual that offers thorough analysis, using a systematic approach and explanation of each method of calculation or operation. Thoroughly rewritten and updated. Not for beginners.

Trading with DiNapoli Levels, by Joe DiNapoli,

Shows how to develop a trading system based on timeframes, trend identification, risk control through trading zones, setup chart patterns, and stops as triggers for both entry and exit. The zones are specified by his unique DiNapoli levels. He also shows which oscillators work and which do not.

Dynamic Trading: Dynamic Concepts In Time, Price and Pattern Analysis, by Robert Miner, 1997, $97

Based on Elliott Wave Theory, author shows how to project price zones for support, resistance and trend termination, as well as time zones for trend reversal. Next, he develops trading strategies based on probabilities and risk control, not predictions of the future. Material is lucid and logical, supplemented with numerous examples. Text was voted the "1999 Trading Book of the Year" by the 1999 Supertraders Almanac. Author is the first place winner of the 1993 Robbins World Cup Championship of Futures Trading and was named the 1997 Market Guru of the Year for his S&P analysis and trading recommendation. Additional tutorials based on author's approach can be found at DynamicTraders.com.

Encyclopedia of Trading Strategies, by Katz and McCormick , 2000, $60 ($45 direct from authors)

Comprehensive collection and evaluation of trading strategies. Reveals what works and what doesn't by providing a rigorous, systematic and unbiased study on the predictive worth and accuracy of traditional and cutting edge methods, such as breakout models, moving average models, oscillator-based entries, seasonality, entries on lunar & solar rhythms, cycle-based entries, entries using neural networks & genetic algorithms). Entry and exit methods are exhaustively examined to see which approaches still work. The pros and cons of optimization. The authors conduct simulations on entire portfolios of tradeables and software needed to reproduce the results can be obtained at a nominal charge. To order, contact authors by A>.

Money, Risk, Portfolio Management

Technical Traders Guide to Computer Analysis of the Futures Markets, 1991

With specific information on how to set up and use computer-generated technical studies of the most popular indicators, the book includes: How to build a trading system tailored to the reader's specific need; Practical instruction on how to display and analyze technical information; Advice for developing well disciplined money management and risk control strategies; techniques for monitoring a trading system to detect if something has gone wrong before major losses occur.

Adaptive Analysis for Australian Stocks, by Nick Radge, 2006

First 50 pages cover money/risk management and explains expectancy and how to use it to create a profitable trading approach. Author then explains how to use price action to quickly recognize a losing trade and exit your position. Part two of the book (the next 100 pages) gives practical advice on applying the philosophy, with sections on defining the trend, price-patterns trading, using confluence to lower risk and increase the probability of a profitable trade, using micro-patterns, and so on.

Trading for a Living: Psychology, Tactics and Money Management, by Alexander Elder, 1993

A trader/psychiatrist summarizes 3 primary skills: disciplining your mind and understanding crowd psychology, market analysis and trading methods, and managing your risk by locating entry and exit points.

Modern Portfolio Theory and Investment Analysis & Investment Portfolio Software, 5th Edition, by Elton, Gruber, Intellipro Inc., 1998

Book presents advanced concepts of investment analysis, portfolio management, selecting efficient portfolios. New to this edition: two institutional chapters on financial securities and financial markets; sections on the uses of Arbitrary Pricing Theory, the performance of international funds, bond management and multi-index models in portfolio evaluation; a totally updated international diversification chapter, plus an interactive portfolio analysis software. Explains various option pricing models (CAPM, Single Index, Multiple Index). All financial terms are explained. Lots of references.

Computerized Trading: Maximizing Day Trading and Overnight Profits, edited by Mark Jurik, 1999

20 authors write about each aspect of trading they know best. Topics include chart analysis, entering and exiting, strategy development and testing, money management, advanced market analysis and modeling, and a consumer's guide to finding the best data suppliers.

Active Portfolio Management: A Quantitative Approach for Producing Superior Returns and Controlling Risk, by Grinold and Kahn, 1999

Clearly and concisely explains the rules of thumb that guide the process of active portfolio management. Details how to apply math analysis to solving practical investment problems and uncovering superior profit opportunities. It does so by outlining an innovative way to uncover raw signals of asset returns, develop them into refined forecasts, then use those forecasts to construct portfolios of exceptional return and minimal risk. Also covers asset allocation, long/short investing, information horizons, and risk dispersion. The book is extremely detailed, well written and mathematically rigorous.

The Intelligent Investor, by Benjamin Graham, 1985

Originally published in 1949 and still widely available. In his preface to the new edition, Warren Buffett says, "I read this book in early 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is." The theme can be distilled from the title of the last chapter, "Margin of Safety," which should be read carefully.

Dynamic Trading: Dynamic Concepts In Time, Price and Pattern Analysis, by Robert Miner, 1997

Based on Elliott Wave Theory, author shows how to project price zones for support, resistance and trend termination, as well as time zones for trend reversal. Next, he develops trading strategies based on probabilities and risk control, not predictions of the future. Material is lucid and logical, supplemented with numerous examples. Text was voted the "1999 Trading Book of the Year" by the 1999 Supertraders Almanac. Author is the first place winner of the 1993 Robbins World Cup Championship of Futures Trading and was named the 1997 Market Guru of the Year for his S&P analysis and trading recommendation. Additional tutorials based on author's approach can be found at DynamicTraders.com.

Trade Your Way to Financial Freedom, by Van K. Tharp, 1998

Tharp gets the reader involved by asking plenty of self-analysis type questions. Questions designed to immerse the reader in the complete process of trading. From understanding biases and success roadblocks...to designing and implementing a winning system...it's all here. Execellent coverage of the 10 parts of trading system design: 1) Market Selection, 2) Market Direction, 3) Setups, 4) Market entry, 5) Protective stops, 6) Market re-entry, 7) Taking profits, 8) Position sizing, 9) Portfolio selection, 10) Multiple systems. The way he articluates Chuck Branscomb's idea of R-Value is worth the price of admission alone. Includes the advanced concept of "expectancy"... a topic that very few traders understand at all. All meat. No fluff.

Chart Analysis & Trading Strategies

Trading Rules that Work: 28 Lessons, by Jason Alan Jankovsky, 2006, $50

Trading Rules that Work introduces you to twenty-eight rules that can be shaped to fit any trading approach — whether you’re dealing in stocks, commodities, or currencies. Book outlines the deeper psychology behind each of these accepted trading rules.

Entries & Exits: Visits to 16 Trading Rooms, by Alexander Elder, 2006, $95

Sixteen traders are interviewed. They trade different markets in different countries using different methods. Each discusses the chart patterns and analysis behind a winning trade and a losing trade.

Technical Analysis of Stock Trends, by Edwards and Magee, 2000, $75

Originally written over 50 years ago, and now in its 7th edition with over 850,000 copies sold, this book explains every aspect of charting, from simple principles to advanced techniques. It will take a while to read (many sessions) because it challenges the reader to absorb very detailed analysis. Some charts are old, but nonetheless a great reference book.

Street Smarts: High Probablity short term trading strategies, by Connors & Raschke, 1996, $175

This expensive book offers powerful specifics on chart pattern recognition that have a high probability outcome. Patterns can be used as trigger-filters in a mechanical system. Futures market only.

Computerized Trading: Maximizing Day Trading and Overnight Profits, edited by Mark Jurik, 1999, $40

20 authors write about each aspect of trading they know best. Topics include chart analysis, entering and exiting, strategy development and testing, money management, advanced market analysis and modeling, and a consumer's guide to finding the best data suppliers.

Momentum, Direction and Divergence, by William Blau, 1995, $50

Shows you how momentum, direction, and divergence form the basis of most technical indicators. Also demonstrates their use and limitations, and how they can be used to create a versatile new set of technical indicators.

Schwager on Futures: Technical Analysis; by Jack Schwager, 1995, $70

Complete and in-depth presentation of classical chart analysis for futures trading. Features a synthesis of market analysis along with practical trading considerations. Contains a 200 page section devoted to real world trading examples and their interpretation.

Schwager on Futures: Technical Analysis Study Guide; by Bierovic, Turner, Schwager, 1997, $30

A study guide to the above book. 64 pages.

The Visual Investor: How to Spot Market Trends, by John Murphy, 1996, $40

Extensive treatment on visually reading price and volume charts using technical analysis. Also discusses sector analysis and global investing. Very basic, assumes little of the reader. Great for beginners. More advanced material can be found in Murphy's "Technical Analysis of the Financial Markets". Comes with a CD (but the software is lame).

Technical Analysis of the Financial Markets, by John Murphy, 1999, $50

This book replaces Murphy's earlier works. Completely up to date, includes strategies for both futures and securities markets. Useful over a wide range of financial instruments. Also discusses candlestick charting and intermarket analysis. Intermediate level.

Trading with DiNapoli Levels, by Joe DiNapoli,

Shows how to develop a trading system based on timeframes, trend identification, risk control through trading zones, setup chart patterns, and stops as triggers for both entry and exit. The zones are specified by his unique DiNapoli levels. He also shows which oscillators work and which do not.

Technical Analysis for the Trading Professional : Strategies and Techniques for Today's Turbulent Financial Markets, by Constance M. Brown, 1999, $50

An advanced book about indicators, oscillators, etc. The author offers alternate uses for classic indicators. One chapter shows how to use volatility bands on oscillators to improve indicator timing. TradeStation Code for each study is included in the book. This book deals with the Fibonacci school of thought, so make sure that is concordant with your belief system before purchasing.

Point and Figure Charting, by Thomas Dorsey, 1995, $60

Point and figure (P&F) charting tracks fluctuations in supply and demand, revealing proming trends early enough for exploitation. Author shows step-by-step how to create, maintain and read P&F charts. Combines theory with real trading techniques. Shows how to time market sectors. Very clear, from simple basics to advanced interpretations.

A Complete Guide to the Futures Markets, by Schwager, 1984, $100

Comprehensive examination of fundamental and technical analysis. Some advanced material. Good math skills are expected. Covers futures and options strategies.

The Art of Short Selling, by Kathryn Staley, $45

Illustrates in detail the entire process of short selling for profit; explains how, when, and why to sell short; and provides current trading examples, guidelines and pertinent regulatory information.

How Markets Work: Options, Securities, Futures, Derivatives

Unexpected Returns: Understanding Secular Stock Market Cycles, 2005

Winner ForeWord Magazine Bronze Award for Best Business/Economics Book of the Year. This investment book uses extensive full-color graphics to explain the fundamentals of the markets-an essential resource before reading how-to books or engaging investment advice. It is a unique combination of investment art and investment science that enables the reader to differentiate between irrational hope and a rational view of current market conditions.

Getting Started in Options, by Michael Thomsett, 1997

A great book for beginners on trading options. Takes you from the basics up to the advanced. Numerous examples.

Option Volatility & Pricing - Advanced Trading Strategies and Techniques, by Sheldon Natenberg

A very detailed and well written manual. Assists option traders in determining which options will move with the underlying stock and which will not. It covers pricing models, volatility, trading strategies, and risk management.

Options, Futures, and Other Derivatives with Disk, John C. Hull

A graduate level business text providing a working knowledge of how derivatives can be analyzed. Hull (U. of Toronto) keeps non-essential mathematics at a minimum while still rigorously introducing the key components of futures markets. The text assumes the student has had introductory courses in finance, probability and statistics.

Essays in Derivatives, Don M. Chance

70 essays on derivatives and their markets; the basic instruments; derivative pricing; derivative strategies; exotic instruments; fixed income securities and derivatives; other topics and issues. Easy to read with almost no equations.

An Introduction to Derivatives with Disk, by Don M. Chance

This comprehensive text provides detailed coverage of options, futures, forwards, swaps and risk management, plus a solid analytical introduction to pricing, trading, and strategy. A flexible mathematical approach places more complex material in end-of-chapter appendices.

A Complete Guide to the Futures Markets, by Schwager, 1984

Comprehensive examination of fundamental and technical analysis. Some advanced material. Good math skills are expected. Covers futures and options strategies.

Very mathematical books ....

Benninga, Simon (1997) Financial Modeling, The MIT Press, Cambridge.
Kwok, Y.K. (1998) Mathematical Models of Financial Derivatives, Springer-Verlag, NY.
Mantegna, R. & H.E. Stanley (2000) An Intro to Econophysics, Cambridge, NYC.
Neftci, Salih (1996) The Mathematics of Financial Derivatives, Academic Press, NY.
Oksendal, B (1998) Stochastic Differential Equations: an intro with applications, Springer-Verlag, NY.
Soong, T.T. (1973) Random Differential Equations in Science and Engineering, Academic Press, NY.
Watsham, T & K Parramore (1997) Quantitative Methods in Finance, Inter Thompson Busi Press, NY
Wilmott et al (1995) The Mathematics of Financial Derivatives, Cambridge, NY.

Successful Traders

Master Traders: Strategies for Superior Returns from Todays Top Traders, by Fari Hamzei, 2006

Lots of books like this one feature Q&A interviews with traders, which can be good reading but short on detail. By contrast, Hamzei got these market masters to describe their strategies specifically, providing a rare glimpse into how they think.

Five Eminent Contrarians: Careers, Perspectives and Investment Tactics, by Steven Mintz, 1995.

Brief profiles on the careers and investment strategies of five famous contrarian investors, including John Neff. Very well-written and contains valuable tips from investors who have made fortunes by going against the crowd.

Market Wizards, by Jack Schwager, 1989

A bestselling classic that delves into the minds of successful traders. Reader typically comes away learning a few common traits: 1) that to be successful, you must be committed, 2) you must have control over your emotions after both losing streaks and winning streaks, 3) you must have self-discipline.

The New Market Wizards: Conversations with America's Top Traders, 2008

Features top traders and their killer strategies. A self-help book giving much needed pointers to anyone who wants to become a better trader. Repeatedly dissects what constitutes fatal emotional pitfalls. One trader focuses on market response to news events, another calculates mathematical probabilities--one even cocks an ear to the noise level on the exchange floor. All rank assiduous research, self-confidence, a specific plan and the courage to cut losses among essentials to success.

The Electronic Day Trader's Secrets, by Friedfertig, West, Burton; 1999

A collection of interviews with 13 successful day traders, who offer good heuristics for surviving in this high-risk arena.

Reference Library, Tax Information

Dictionary of Finance and Investment Terms, by Downes and Goodman, 1998, $13

Includes new terminology. Designed for all investors, students and professionals. Includes entries from accounting, consumer and business law, economics, taxation, and related fields.

The Trader's Tax Solution: Money-Saving Strategies for the Serious Investor, by Ted Tesser, 2000, $60

Gives traders information on how to reduce tax liability and be better prepared once tax preparation time rolls around. This comprehensive guide covers all business planning issues and provides tax-saving strategies, explaining in detail what is deductible and what is not, and what documentation is required. Individual case studies, real-world examples, and model tax returns. Rated Five Stars!

Tax Havens of the World, by Thomas Azzara, 1999, $75

Learn to trade stocks, bonds, options and commodities free of capital gains taxes. This tax expert shows you how professional traders shield their profits from the IRS - legally.

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