I was curious to see what I had missed in my decades of reading the best books on trading and the stock market. I was glad to see that we all shared a love of the books that I thought were some of the very best. I believe this is an excellent and informative list for new traders upon entering the trading field. While many lessons will only be learned after experiencing real trades, real losses, and the challenges of trading psychology, I still believe in learning from others as a shortcut. I have read the first 22 of these 25 books and I give them all 5 out of 5 stars. Each book title is linked directly to its Amazon page to simplify your research.
Many people spend more time planning their vacation than their financial future. This is why too many end up nowhere. Self control, education, saving, investing, and trading are paths to building net worth. We earn money from creating value for customers, a company, our even ourselves, through education and experience. Our net worth is the difference between the products we consume and the value we create for businesses.
Financial Peace: Dave Ramsey taught me to break free from the burdens of consumer debt and living beyond my means. 15 year mortgages can save you six figures in interest, new cars cost you thousands of dollars as you drive them off the lot, and credit cards can be a prison without self control. Staying out of debt is a path to freedom, regardless of your economic status.
Rich Dad, Poor Dad: Robert Kiyosaki taught me that the employee quadrant was not the only way. There are also the self-employed, business owner, and investor quadrants that people can operate in. Cash flow from assets are a better way to create an income than selling yourself to an employer.
Your Money or Your Life: This book explains that there is no “Job Charming”. The best plan is to free ourselves from the need of a job by having assets that pay our bills, without having to sell our time to someone that will profit from it more than we will.
The Millionaire Next Door: This book shatters the perception that people with nice houses and new cars are rich. The vast majority of the “Jones'” that so many try to keep up with are high income earners than live paycheck to paycheck, and spend every penny they make on their lifestyle. Many are up to their eyeballs in debt. The true millionaires are many times, the methodical, middle class that dedicate themselves to building capital and success. They are successful due to their self control and work ethic.
Trend Following: Michael Covel taught me the power of trends in capital flow, and to follow the path of least resistance with my trading and investing capital. Reacting to what is happening instead of predicting, or having opinions about what will happen, is the easiest path to building capital in the financial markets.
Here are the ten top trading films, movies, and documentaries made based on popularity and entertainment value.
“The Trader” Documentary: This documentary gives a rare look inside the world of one of the greatest money mangers of our time.
Michael Covel’s Trend Following Film, Broke:Covel does a great job showing how the economic system failed in 2008 and how trend following trading is a better path than gambling and buy and hold investing.
The Big Short:This is my all-time favorite trading movie. It told the stories of three traders that bet against the housing market bubble and won big.
Wall Street:A tale of all that is wrong with Wall Street insider trading.
Wall Street: Money Never Sleeps: This is much better than the original, and tells the story of the comeback of Gordon Gekko.
Trading Places: The classic comedy where commodity traders try to turn a street hustler into a trader.
Margin Call: I really enjoyed this drama about traders inside an investment bank at the beginning of the 2008 financial meltdown. I wish this movie was longer.
Floored: This movie did a good job of showing how the trading life can turn your life upside down, or for some people, it can make you fabulously wealthy.
Boiler Room: This movie is about how a boiler room operation works by hawking non-existent stocks and bonds for non-existent companies to enrich the ‘brokers’ peddling these worthless stocks.
The Wolf of Wall Street: This is a raunchy, classless tale of greed based on the writings of Jordan Belfort, a stockbroker in penny stocks convicted of market manipulation. This movie may contain more drugs, sex, nudity, and cursing than you see in the other movies, but it’s ultimately a comedy and works as pure entertainment.
After reading several hundred trading books I have come to the conclusion that the vast majority are a complete waste of time. However the 10% or so that are good can be life changing and improve your trading dramatically. In looking through my trading library for life changing books, checking out the top sellers on Amazon, and checking the rankings for past polls I have done on trading books here are the books I consider the best ever written.
Market Wizards, Updated: Interviews With Top Traders : In this classic book Jack Schwager sits down to talk to some of the greatest traders in the world and edits the interviews to share their wisdom with all traders.
Reminiscences of a Stock Operator : You know a trader is serious if he has read this book. This almost century old book was the birth place of much of the trading wisdom that still works to this day. A cloaked autobiography of Jesse Livermore that is a fun read and can improve your trading.
Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House :In the markets the 10% of profitable traders are actually exercising an edge over the 90% that lose money. The winning traders operate like a casino and the unprofitable traders act like gamblers with the odds stacked against them.
Trade Your Way to Financial Freedom :This book covers all the necessary elements of successful trading in great detail. The explanation of the mathematical risk of ruin is one of the most important lessons in the book and can change a traders course to success.
How I Made $2,000,000 in the Stock Market :The rare true story of how an ordinary guy made millions trading the right stocks with the right timing, in the right market. An inspirational story that has many principles that foreshadow trend following.
I am sure you have heard the term ‘do your homework’ thrown around by more experienced traders. This is a big part of what they are talking about. Learn the right principles, learn some history, learn how to manage yourself and implement winning systems with discipline. These books are a great place to start.
