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Yes, I can recommend two books for some relatively light summer readings. Reminiscences Of A Stock Operator, by Edwin LeFevre, is at the top of the list. First published in 1923, this book is a classic that you will want to read over and over again. My copy is full of highlights and remarks.
Jesse Livermoore, the central character, started speculating in bucket shops on the East Coast and worked his way up to Wall Street. Trading in the trenches, Livermore learned first hand what works and what doesn’t work. In fact, many of his observations have become standard trading maxims. For instance:
On following the trend: Obviously the thing to do was to be bullish in a bull market and bearish in a bear market. Stocks are never too high for you to begin buying or too low to begin selling. There is only one side of the market and it is not the bull side or the bear side, but the right side.
On stops: Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.
On the tape: A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask for reasons or explanations.
The second recommendation is The New Market Wizards by Jack Schwager. In fact, Schwager interviewed over 30 traders and asked them for book recommendations. By far, the most recommended book was Reminiscences Of A Stock Operator. Schwager covers currencies, futures, fund managers, market timers, system developers and trading psychology. His writing style appeals to the seasoned professional as well as the layman. Highly recommended! Check them out at the Stockcharts.com bookstore.
