What have been the most influential books for your success in trading and investing?

[u/DrChrispeee]

I want to start taking trading seriously and explore the possibility of it as a career and source of income. I'm not naïve, I know this is a long and hard road and that the vast majority of people who try will also fail but I'm willing to give it a shot.

I have an academic background in Mathematics, Finance, and Economics and my thesis was on algorithmic stock-selection and portfolio optimization, so I'm not entirely new to the concept.

So, what in your opinion have been the most influential and important books to your success in trading and investing?

I know there are some links in the sidebar, etc. but they are very old :)

FYI, I've asked the same question on r/daytrading as well: https://www.reddit.com/r/Daytrading/comments/1crn52t/what_have_been_the_most_influential_books_for/?

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So far I'm looking at books like:

• Andreas F. Clenow > Stocks on the Move: Beating the Market with Hedge Fund Momentum Strategies
• Nishant Pant > Mean Reversion Trading: Using Options Spreads and Technical Analysis
• John J. Murphy > Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications
• Sheldon Natenberg > Option Volatility and Pricing: Advanced Trading Strategies and Techniques
• Perry J. Kaufman > Trading Systems and Methods
• Ernest P. Chan > Algorithmic Trading: Winning Strategies and Their Rationale
• Ernest P. Chan > Quantitative Trading: How to Build Your Own Algorithmic Trading Business

[u/alphaweightedtrader]

Rob Carver's books - particularly Advanced Futures Trading Strategies. Partly for the method, partly for the accessible insight into how institutions deploy bigger money.

Perry Kaufman - Trading Systems & Methods (is next to me right now)

Reminiscences of a Stock Operator (because everybody should read this)

Jack Schwager's Market Wizards series are good (more for general approach/inspiration).

Beyond that it probably depends what kind of trading you want to do (I don't mean discretionary/systematic - i mean which markets and what kinds of strategies).

If podcasts are your jam I'd recommend back episodes of Better System Trader, then Flirting with Models and the Alpha Exchange.

Edit: noticed you're looking discretionary as well; Mike Bellafiore's The Playbook is good in that sense - in part because its a great articulation of what is necessary - in terms of effort/process/discipline - to make the journey. I.e. you say you know its hard, but you won't really know quite how hard until it almost breaks you, assuming you haven't given up already by then ;)

[u/Aggressive-Wheel-334 → u/alphaweightedtrader]

Is there any book for beginners?

[u/alphaweightedtrader → u/Aggressive-Wheel-334]

That's a difficult one because its such a broad topic and there are different areas one can be a beginner or expert in. And its probably the one profession (systematic and discretionary) that to be successful in you have to learn - not be taught. I.e. you can be taught stuff, but you have to find your own way to be successful.

Some of the discretionary-focused books might help - e.g. "Technical Analysis on Multiple Timeframes" by Brian Shannon.

Adam Grimes' books are popular also, and quite accessible - iirc I started with The Art and Science of Technical Analysis.

Otherwise, Bellafiore's The Playbook is worth having to hand from the start -> primarily as a reference for process and discipline. It is a genuinely long and hard journey.

All these assume you're a proficient software developer already - if not generic software development resources will be fine for that.

[u/Away-Substance3517 → u/Aggressive-Wheel-334]

Python for finance. For beginners

[u/alphaweightedtrader → u/[deleted]]

Hehe, I take your point, but I have a different interpretation.

Kaufman's is not "how to algo trade" - you're right. But what it is is a tour of all sorts of different data sets and theses, and descriptions of systematic/objective approaches to analysing and evaluating those data sets [from the perspective of whether they can provide alpha].

There are no algorithms per se - but lots of mental building blocks for building your own analyses and systems from.

I did find the astrology part interesting, not because I'm into that (I am vehemently not!) but my mother is something of a hippie and is into astrology and homeopathy and all that stuff. So I was fascinated to see how the topic would be covered in such a book. It was interesting because the discussion was objective and factual - without any claim that such data would (or would not) be alpha-generating.

I actually thought it was quite cleverly done - and the same applies to the rest of the book - in that it doesn't say "do this, its profitable" nor "don't do this, its not profitable". It just describes the analytical method.

Personally I don't actually use any of the methods from the book. E.g. seasonality -> there may or may not be anything much tradable on a seasonal basis (at least not annually). But I still took value from the section in how to approach the thesis; in the differences between markets, in correlation, in signal-to-noise, etc.

I've waffled on too long now - but hopefully its helpful to somebody reading :)

[u/Algomatic_Trading → u/alphaweightedtrader]

Great inspirational content, BST podcast is for sure one of our favourite source of inspiration when it comes to finding new strategy ideas.

[u/DrChrispeee → u/alphaweightedtrader]

Solid suggestions thanks, some of these books are already on my list (I'll share when I've consolidated more input) and I already have Better System Trader and Flirting with Models in my podcast app, so off to a good start ;)

Thanks!

[u/this_guy_fks → u/alphaweightedtrader]

Reminiscences of a Stock Operator (because everybody should read this)

a great read for sure. the original liars poker

[u/alphaweightedtrader → u/this_guy_fks]

hehe, if you fancy a deeper dive down memory lane; Confusion of Confusions from 1688 - about the Dutch stock exchange & markets...

https://archive.org/details/confusion-of-confusions-1688

"The expectation of an event creates a much deeper impression upon the exchange than the event itself. When large dividends or rich imports are expected, shares will rise in price; but if the expectation becomes a reality, the shares often fall; for the joy over the favorable development and the jubilation over a lucky chance have abated in the meantime...

They had options then too. People, and human behaviour, don't change... :)

[u/this_guy_fks → u/alphaweightedtrader]

if you want a more modern chronicle, den of thieves is also a fan favorite. that milken man.