I want to briefly describe my ten favorite trading books. I’m not going to give them in any particular order because I’m not sure I can rank them that concisely. However, these are my ten favorites and I’ve ranked them alphabetically by author, except that three of the books are my own and I’ve included them at the end. In addition, most of them are classics, so my description of each of them will be brief.

1) Easterling, Ed: Unexpected Returns: Understanding Secular Stock Market Cycles. Fort Bragg, CA: Cypress House, 2005. This is a self published book in which Ed does a masterful job of helping people get a major perspective of why the stock market will do what it’s going to do. If you want to understand the big picture, then this book is a must read. Michael Alexander’s book, Stock Market Cycles is also a favorite book, but I only wanted to pick one book of this type, so this is the one I selected.

2) Faith, Curtis: Way of the Turtle. New York: McGraw-Hill, 2007. I was so impressed by it that I begged to write the foreword and I did. First, it paints a very clear picture of what is necessary for trading success. Curtis says in very concise terms that it’s not about the trading system. Instead, it’s about the trader’s ability to execute the trading system. Secondly, it probably has the most lucid description of how some of the principles of behavior finance apply to and influence trading that I’ve ever read. The third aspect is that I really like Faith’s emphasis on game theory and using it to explain how a trader should think.

All of this together with a number of stories about Curtis’ experiences as a Turtle make it a very valuable read.

3) Graham, Benjamin. The Intelligent Investor: The Classic Text on Value Investing. New York: Harper, 1995. Value investing is one of the best ways for the long term investor to beat the market. This is the classic text of value investing and it’s the essence behind much of what Warren Buffet does. So if you have the desire to do this sort of investing, then this book is a must read.

4) LeBeau, Charles and David W. Lucas. The Technical Trader’s Guide to Computer Analysis of the Future’s Market. Homewood, IL: Irwin, 1992. I’ve been associated with Chuck for a long time and he’s a presenter in our systems workshop. And the reason he is a presenter is this book. It probably does the best job of any book up to it’s publication date of taking apart systems into components and showing you how to logically think about and develop systems.

5) Schwager, Jack. Market Wizards. New York: Institute of Finance, 1988. Jack Schwager interviews 16 of the top traders in the world (and he also interviewed me.) This book, like no other until its sequel, really elucidates what’s important for trading success. I’ve always said that trading success consists of the commonalities of what great traders do and how they think. And if you want to learn that, then this book is the place to start.