20 Best Stock Trading Books for 2021
1. A Random Walk Down Wall Street
Currently in its tenth edition, this book is a great first read for those starting a portfolio. Indexing, diversification, trends, bubbles, the value of patience coupled with time, alongside many more core concepts are all pronounced within.
2. The Little Book of Common Sense Investing
Jack Bogle is the founder of The Vanguard Group, known for providing the lowest cost funds in industry. Jack's message is simple, keep costs low and invest in market indexes for the long run. Jack's other book, Common Sense on Mutual Funds, is another best seller and breaks down mutual fund investing. Another great book with a similar message can be found in Jeremy Siegel's, Stocks for the Long Run.
3. How to Make Money in Stocks
This is a classic by William O'Neil, describing the ins and outs of his CANSLIM system for finding future big winners in the stock market and how to time entries and exits. It combines fundamental and technical analysis and is a good guide for new investors.
4. The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
Using his Oaktree Capital client memos as a foundation, Howard assembled a collection of the 21 most important things to know about investing. The book introduces multiple keys to long-term success including, "second-level thinking," the price/value relationship, patient opportunism, and defensive investing.
5. Reminiscences of a Stock Operator
This book is a true page-turner. It is a breath-taking recount of how a young boy managed to amass one of the largest fortunes by speculating despite going broke a few times in his career. He has timeless advice for investors("I've always made my money from sitting, not thinking") which will help your trading for years to come.
6. Buffett: The Making of an American Capitalist
This book sheds insight into the ways and means of the Oracle of Omaha. Warren Buffett's thoughts are insightful and his methods may yield fruitful rewards for investors with enough patience to learn them, understand them and apply them correctly.
7. Market Wizards
This book is a collection of interviews of successful traders in the 1970s/80s. Their experiences are fascinating, inspirational, and traders can draw endless lessons from their stories. Jack Schwager's original interviews became so well known that he has published four more books since: The New Market Wizards (1994), Stock Market Wizards (2003), Hedge Fund Market Wizards (2012), and a summary of essential lessons from nearly 50 interviews with The Little Book of Market Wizards (2014).
8. Trade Your Way to Financial Freedom
This is a gem that encompasses investor psychology and system construction. While it may not give you a "Holy Grail" (an unbeatable method to the markets) for trading, it will give you the basics you need to construct a winning system. There is something for everyone in this book.
9. The Intelligent Investor
The foundation for value investing and being successful in the market, Benjamin Graham's classic has sold over 1 million copies and earns its spot on every investors' bookshelf.
10. One Up On Wall Street
This is an investment classic that will give the individual investor hope. Peter Lynch explains how Wall Street may not be able to find the best investing opportunities from the start and shows step-by-step how the individual investor can find the next winner.
11. The Little Book That Beats the Market
Explores the basic principles of investing in the stock market. The book breaks down the author's proven "magic formula investing" method of outperforming the market by investing in quality companies at discounted prices.
12. Liar's Poker
An insider's account of the late 1980s at Salomon Brothers. An interesting, though perhaps not profitable, narrative of how Wall Street works. Other Michael Lewis great reads: The Big Short: Inside the Doomsday Machine and Flash Boys.
13. Alchemy of Finance
This book, along with Soros's more recent book, The New Financial Paradigm explain the author's theory of reflexivity and how it relates to the market. Though it may not provide a direct system for trading, it is extremely thoughtful and deepens one's understanding of how the financial markets work. The book may be a bit dense but it is rewarding for those who are willing to finish it.
14. Fooled by Randomness
This book, which would go along well with "The Black Swan", explains the author's thoughts about how randomness plays a larger role in our lives than we expect. For traders, this would imply that risks are usually large than we expect. Also, it would mean that some things in the financial world aren't exactly what they seem.
15. Japanese Candlestick Charting Techniques
This book introduces candlestick charting, which some investors may find useful in their trading. It sure helps to make charts more visual!
16. Extraordinary Popular Delusions and the Madness of Crowds
Tulipomania, the South Sea bubble and the Mississipi Land scheme are covered in this book, showing how herd mentality worked to create bubbles in past eras. It may serve as an interesting read as well as a guide for dealing with future bubbles.
17. Common Stocks and Uncommon Profits
This unseeming book is written by Philip Fisher, who Buffett credits with most of his success. In the age of quantitative finance, this book is a must-read for those who want to understand how to inspect a company qualitatively.
18. Irrational Exuberance
As the winner of the 2013 Nobel Prize in Economics, Robert Shiller understands the markets and has spent his career studying their movements. An author of multiple books, Irrational Exuberance explores how trends turn into booms and ultimately bubbles that burst.
19. When Genius Failed: The Rise and Fall of Long-Term Capital Management
A scintillating narrative of how one of the darlings of the hedge fund world rose and how it fell. A reminder for traders to keep their minds focused on risk and their circle of competence.
20. Encyclopedia of Chart Patterns
An extremely detailed work that rivals "Technical Analysis of Stock Trends" and should provide traders with a complete understanding of chart patterns. The hard work is to apply the knowledge.
About the Author
Blain Reinkensmeyer As Head of Research, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in The New York Times, Forbes, and the Chicago Tribune, among others.