Stuff Your Stocking With Stuff on Stocks

What is it about the holidays that causes some of us to pick up a favorite book and spend a few hours doing nothing but reading? Beats me, but it's sure my favorite time of year to curl up with a good book.

Therefore, in that spirit, and to also answer the question I get asked the most -- "What books do you recommend I read to get started with technical analysis?" -- I present the few books I'd put on any aspiring trader's or technician's shopping list. I've mentioned most of these before; in fact, they've appeared in one or more columns. Nevertheless, as I've read and reread many of them over the years, the list has been changed, modified and streamlined.

Read on ...

1. Market Wizards: Interviews With Top Traders by Jack Schwager. This is the first book I ever read on trading, and I still read parts of it every week. It's really the only book I know that gets inside the mind of the trader, and I've never read anything quite as good since. Pay particular attention to both the Tom Baldwin and Ed Seykota chapters. In my mind, both are Hall of Famers and you can learn a ton from these guys.
2. How Charts Can Help You in the Stock Market by William Jiler. For years I've recommended Technical Analysis of Stock Trends by Robert D. Edwards and John Magee. But this nifty little book really has all the greatest hits of charting. Plus, it's not nearly as laborious as Edwards and Magee.
3. How to Make Money in Stocks: A Winning System in Good Times or Bad by William O'Neil. Want to know where Gary's trading roots are found? Start right here, as this book still provides all the basics for a breakout method of trading. The only catch is that O'Neil kind of shuns the short side. Still, it's a must read.
4. How I Made $2,000,000 in the Stock Market by Nicolas Darvas. Some say Darvas made up this tale. Others swear it's the truth. Regardless, this book is valuable to read not only for Darvas' description of his breakout method but also because he gets inside the mind of a trader better than anyone, with the exception of Schwager. I've never run across anyone who didn't love this little gem.
5. When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein. This book was more interesting than I thought it would be, as the raveling and unraveling of Long Term Capital Management makes for a great yarn. But the real value was on how a methodical trading system could go wildly awry. Fascinating stuff that every trading system developer should read.

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6. Shorting columns by GBS. I really wish there was a good book on shorting that made the subject straightforward and nonthreatening. I've read a few, but most focus on shorting due to fundamentals. Yuck.

   Instead, go back through my archives and search for my columns on shorting. I'm sure I don't have the perfect technique, but it's a good start.

7. Anything by Dave Barry. They're not trading books but when I want to read something that will make me laugh, no matter how bad a day I've had, I always turn to Barry. For a good start, try Dave Barry in Cyberspace. You probably won't read five funnier books in your life.

There, that should get you started. Of course, I left off many fine books, and no doubt many of your favorites. But these are books I keep coming back to, and they're the ones that best distill my style of trading as well as my philosophy of technical analysis. Enjoy.