Revealed: My 4 Must-Read Trading Classics

You can always find time to learn and become a better trader.

As a trader, analyst, commentator, and ex-floor guy, aspiring market pros will sometimes come to me to ask for recommendations on the best books to read.

But I assume that most folks don’t care about fly fishing stories that transport me to quiet streams in the Upper Peninsula. They’re looking for investing insight. So instead of fishing fiction, I usually share a collection of reading material from my old, unofficial Trading Floor Book Club

The first book on the list is the classic Reminiscences of a Stock Operator, first published in 1923 chronicling the famed Jesse Livermore. The quotes in this classic have held the test of time, like this one: “There is one side to the stock market; and it is not the bull side or bear side, but the right side.”

Jack Schwager’s Market Wizards is also a must read to get a glimpse into the mindset of the best of the best in the business.

Here are 4 other favories from the trading floor:

1) Rotten Heart of Europe: The Dirty War for Europe’s Money by Bernard Connolly – A prominent European economist was fired for honest evaluation of one currency. Amazing foresight into potential economic and social problems ahead in the EU.

2) David and Goliath by Malcolm Gladwell – The author challenges how we think about obstacles and disadvantages.

3) The Quest for Alpha: The Holy Grail of Investing by Larry E. Swedroe – The debate between passive investing and stock picking with market timing techniques.

4) Investment Mistakes Even Smart Investors Make and How to Avoid Them by Larry E. Swedroe and RC Balaban – How to avoid being your worst enemy and how to win by not losing.

That’s plenty of titles to get you started on your own reading journey. Good luck!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: Let your winners ride!

Greg Guenthner
“As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.”

– Jesse Livermore

Well before most speculators discussed the market in terms of trends, legendary trader Livermore possessed a deep understanding of the madness of stock market participants. He knew the trend was his friend – and he was more than content to ride it until it stalled out.

These days, it feels as if traders’ timeframes are getting shorter and shorter. Instead of letting a trade run its course, speculators are taking profits in a matter of hours, or even minutes. Sure, they might make some spare change here and there. But the real money is made by grabbing onto a big trend and not letting go until the market shakes you off.

If you’re confident in your process, don’t be afraid to let your winners ride!

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

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