Given the complexity of the topic, it is difficult to find a best seller list for day trading books that you can trust. Finding a reliable source with values aligned with yours can be tricky. New and experienced day traders are always eager to soak up all knowledge and information available, as things always happen fast on Wall Street, and technology is changing even faster.
Even so, some basic age-old philosophies still ring true and we would love to share with you our insight into some of the best educational and interesting material for day traders from age-old classics to revealing documentaries set in today’s fragmented market environment. The following day trading book list is sure to enrich and enlighten an up and coming trader and even the experienced quantitative trader.
Reminiscences of a Stock Operator
This classic book was published in 1923, and written by American author Edwin Lefévre. While claiming to be fictional it clearly depicts the financial and investing life of Jesse Lauriston Livermore, a well-known day trader and securities analyst who started his trading career at the age of 14.
Jesse Livermore was born in 1877 in Massachusetts and left the life planned for him on the family farm to put his analytical skills to use trading stocks. He is famous for making multi-million dollar fortunes during the 1920’s, (over one billion dollars by today’s standards), and losing them several times over. Throughout his trading career, he amassed a wealth of knowledge that has been shared for decades, including the following quotation, one of many, that is shared in this book:
“It was the change in my own attitude that was of supreme importance to me. It taught me little by little, the essential difference between betting on fluctuations and anticipating inevitable advances and declines, between gambling and speculating.”
Given the change of the markets since this book was written, most notably the advent of computerized algorithms and the decline of human interaction, it may appear that some of these factors have been removed from the decision making process. Edwin Lefèvre reminds us that in spite of the changes with technology, these human factors still drive the machines we use today.
Reminiscences of a Stock Operator has offered wisdom to investors and traders for generations, even Alan Greenspan is quoted as saying that it is “a font of investing wisdom”. An updated version was published in 2009 with new commentary and insights into the life of Jesse Lauriston Livermore.
We highly recommend this book as it is sure to please while enriching your understanding of trading stocks.
Market Wizards, Updated. Interviews with Top Traders
Jack Schwager’s original book, Market Wizards, published in 1989 delves into the thoughts and attitudes of some of the most successful Wall Street Traders. In his new version, Market Wizards, Updated – Interviews with Top Traders, Schwager does not disappoint with new interviews and insight into some wildly successful traders in the stock market.
Schwager features interviews with big name money-makers like Paul Tudor Jones, founder of Tudor Investment Corporation, hedge fund manager and philanthropist. He also interviews Ed Seykota, a commodities trader with degrees in both Management and Electrical Engineering from MIT and an original pioneer of computerized systems trading.
Bruce Kovner rarely gives out interviews, in fact he declined an interview to Fortune Magazine when they wanted to run a story called “The 11 Billion Dollar Man”. He didn’t want that kind of publicity. Bruce Kovnar graduated from Harvard College in 1966, then began to trade commodities. In 1983 he founded Caxton Associates, a well-known hedge fund.
Jack Schwager uncovers their trading philosophy, thought process and the skills deemed necessary to be a successful trader on Wall Street. Schwager does a nice job of summarizing what he believes to be the biggest take away from his interviews, highlighting things of importance to be learned from each successful trader.
Shwager offers a variety with his interviews spreading them across different markets with each success story differing from the last. One thing he notices as a constant, however, is that solid methodology combined with the right mental attitude are fundamental characteristics for trading success.
Give Market Wizards a read, we’re sure you will find it as enjoyable as we do.
The Disciplined Trader, Developing Winning Attitudes
The Disciplined Trader, written by Mark Douglas and published in 1990, is a valuable tool for a trader at any stage in his career. Whether new to the markets, or a seasoned veteran, Douglas takes a look at the psychological practices of successful traders. Douglas offers up a step by step system for traders to understand their thought process and how they may inadvertently be limiting their earnings.
Douglas lays out three stages to becoming a successful trader, helping the reader understand how their very thoughts control how they perceive the markets. Douglas helps us to reign in our emotions whether we’re having a profitable day or experiencing some losses.
In this ever-changing market environment, staying on top of the market can be challenging enough, keeping your psychological composure can be even more challenging.
While computerized algorithms are conducting trades, let’s not forget it’s the human factor that drives those choices, even automatic ones. Keeping your cool and control of your emotions can be the difference between earning, or losing, thousands of dollars.
We give The Disciplined Trader two thumbs up and recommend that you give it a look.
Flash Boys, a Wall Street Revolt
Michael Lewis is the author of Flash Boys, published in March of 2014. This revealing non-fiction account of the rise in high frequency trading reveals how, as Lewis claims, the market is rigged.
The book starts out focusing on the need for speed, the speed of trades as they are sent through high speed fiber optic cables. These cables, at times giving an advantage of only microseconds (a microsecond is one millionth of a second), give big Wall street banks and brokers an advantage worth billions of dollars. In fact, Lewis reveals how many of them were willing to pay millions of dollars simply to gain a few microseconds of an advantage.
This book explains how electronic algorithms have replaced the human trader on the floor, and how this sweeping technological change has impacted the markets.
Lewis puts much focus of the book on Brad Katsuyama, founder of IEX, the Investors Exchange, and several of his colleagues who contributed to not only unveiling the bitter truth about what was happening in the markets, but offering a solution to fix it. Brad set out on a mission, turning down million-dollar employment offers, to pursue the truth about what was happening in the markets since the onset of electronic trading. He never lost sight of his goal of informing investors of the truth, and maintaining his ethical values.
Flash Boys is a very enlightening book for not only day traders, but anyone with a retirement or investment account of any size. Michael Lewis grabs your attention with the first chapter and keeps you engaged and wanting to know what’s coming next until the very end. This one is definitely a worthwhile read.
Trading Systems and Methods (5th Ed.)
Written by Perry Kaufman nearly 30 years ago, Trading Systems and Methods is available in the Fifth Edition with updates for the markets of today. This day trading book provides techniques and tools to help day traders meet their needs. Trading Systems compares systematic methods in almost all areas including risk management, statistics, trends and momentum and arbitrage.
Kaufman details each technique and helps you understand how to use it to your advantage. If you want more explanation on statistical and mathematical concepts of trading systems, this is a good read for you.
This updated Fifth Edition gives more information on systems in the current market environment and the risk associated with those systems than previous versions. This version includes access to a website packed with additional materials, and spreadsheet programs for an interactive experience.
This day trading book provides valuable reference to current trading systems, and methods and techniques to use them advantageously to further your career as a successful day trader. We recommend adding this to your personal library.
Great Point Capital is pleased to offer you our top picks for these fantastic day trading books.
Headquartered in Chicago, Great Point Capital, LLC, is a member of FINRA and has been serving the trading community since 2001. Our mission is to be the leader in the equity day trading community by giving the best traders the tools and support to make the most of their trading careers.
Contact Great Point Capital, LLC today, in either our Chicago Office, or our Austin Office, to learn more about how we can successfully trade together with high performance results. Great Point Capital, LLC offers buying power, access to Takion software platform with excellent IT support, and the benefits of working with an experienced team.