In the rapidly evolving realm of financial markets, possessing knowledge equates to having an advantage. Regardless of whether you are new to trading or an experienced investor, continuously acquiring knowledge, experimenting and refining your trading strategies is crucial. One effective method to broaden your understanding of trading is to delve into books about trading written by top-notch authorities in the field.
The following books serve as valuable repositories of trading expertise garnered through extensive testing of various trading techniques, analytical tools and trading concepts. By immersing yourself in these texts, you can gain deeper insights into the art of trading. Besides, you can enhance your own approach with the wisdom shared by renowned trading professionals.
1. Long-Term Secrets to Short-Term Trading – Larry Williams
Considered a paramount choice among books about trading, this popular book stands out as one of the finest reads on the subject. Penned by an exceptionally accomplished trader boasting a remarkable six decades of experience in the field, the book reveals the hidden strategies behind short-term trading within an erratic and unstable market.
In addition, it elucidates the basics of market fluctuations and patterns, highlights optimal moments for potential trade exits. It also furnishes valuable insights into the most potent methods for short-term trading.
Who is Larry Williams?
Larry Williams, a renowned figure in the trading world, has authored 11 books centered around trading strategies. Notably, he has also developed various technical indicators, with Williams %R being among them. However, Larry’s fame extends beyond his literary contributions. He gained widespread recognition by emerging as the victor in the prestigious 1987 World Cup Championship of Futures Trading. Remarkably, he began the competition with a mere $10,000 investment and he remarkably transformed into an astounding $1,100,000 (representing an impressive net return of 11,300%) over a span of 12 months, using real money.
2. Technical Analysis of the Financial Markets – John J. Murphy
Technical Analysis of the Financial Markets builds upon and modernizes Murphy’s renowned work, Technical Analysis of the Futures Markets. With the inclusion of approximately 400 real-life charts that provide clarity on every essential aspect, this book encompasses a wide range of topics, including:
- The fundamentals of technical analysis and the construction of charts.
- Essential knowledge about trends and the fundamental elements of chart analysis.
- Price patterns, encompassing both major reversal and continuation patterns.
- Analytical techniques such as moving averages, oscillators, contrary opinion, and other indicators.
- Time cycles, interrelationships between different markets, effective money management strategies, and trading tactics.
Both novice traders and seasoned professionals will discover a wealth of immediately applicable insights within this authoritative yet easily comprehensible guide.
Who is John J. Murhpy?
John Murphy started his career as an assistant in a Wall Street financial firm. He then moved on to become a director of technical analysis, the author of several books about trading for novice and experienced traders and a technical analyst for a business news channel CNBC. He currently works as the chief technical analyst at StockCharts.com – a leading financial analysis platform.
3. Mastering the Trade – John F. Carter
The author of this book addresses the reader who is contemplating trading as a potential full-time or part-time occupation. However, it is important to note that even individuals who identify as “investors” can benefit from reading this book, as it does not render their time or money wasted. The author dedicates a significant portion of the book to exploring the psychology of trading. After all, who among us hasn’t allowed emotions to cloud our judgment and negatively impact our financial decisions?
This book primarily falls under the category of “how-to,” serving as a comprehensive guide for aspiring traders. The author, Carter, goes the extra mile by dedicating a chapter to discussing the hardware and software requirements for trading. Furthermore, the book includes a chapter focusing on the importance of developing a trader’s business plan.’
The book also delves extensively into different trading “setups,” encompassing both intraday trading and swing trading, where positions are held for days or even weeks. Carter provides in-depth coverage of various technical indicators that he employs for different types of trades. Notably, he discusses these indicators with comprehensive detail, highlighting their application and effectiveness. It is worth mentioning that there is a noticeable variation in the indicators he recommends for trading E-Mini S&P contracts compared to those he suggests for trading in the foreign exchange (FX) market, offering insights tailored to specific trading contexts.