Van Tharp’s Favorite Trading Books
I’m often asked, “What are your favorite trading books?” Here I’ll briefly describe my favorite trading books.
I don’t list them in any particular order because I’m not sure I can rank them that concisely. I’ve ranked them alphabetically by author, except that three of the books are my own and I’ve included them at the end. In addition, most of them are classics, so my description of each of them will be brief.
In most cases they are available for sale through our Amazon bookstore and links are provided. If not, a note will follow the description.
1) Easterling, Ed: Unexpected Returns: Understanding Secular Stock Market Cycles. Fort Bragg, CA: Cypress House, 2005.
This is a self-published book in which Ed does a masterful job of helping people get a major perspective of why the stock market will do what it’s going to do. If you want to understand the big picture, then this book is a must-read. Michael Alexander’s book, Stock Market Cycles is also a favorite book, but I only wanted to pick one book of this type, so this is the one I selected. Find this book on Amazon here.
2) Faith, Curtis: Way of the Turtle. New York: McGraw-Hill, 2007.
I was so impressed by it that I asked to write the foreword and I did. First, it paints a very clear picture of what is necessary for trading success. Curtis says in very concise terms that it’s not about the trading system. Instead, it’s about the trader’s ability to execute the trading system. Secondly, it probably has the most lucid description of how some of the principles of behavior finance apply to and influence trading that I’ve ever read. The third aspect is that I really like Faith’s emphasis on game theory and using it to explain how a trader should think.
All of this together with a number of stories about Curtis’ experiences as a Turtle make it a very valuable read. Find this book on Amazon here.
3) Graham, Benjamin. The Intelligent Investor: The Classic Text on Value Investing. New York: Harper, 1995.
Value investing is one of the best ways for the long-term investor to beat the market. This is the classic text of value investing and it’s the essence behind much of what Warren Buffet does. So if you have the desire to do this sort of investing, then this book is a must-read. Find this book on Amazon here.
4) LeBeau, Charles and David W. Lucas. The Technical Trader’s Guide to Computer Analysis of the Future’s Market. Homewood, IL: Irwin, 1992.
I’ve been associated with Chuck for a long time and he’s a presenter in our systems workshop. And the reason he is a presenter is this book. It probably does the best job of any book up to it’s publication date of taking apart systems into components and showing you how to logically think about and develop systems. Find this book on Amazon here.
5) Schwager, Jack. Market Wizards. New York: Institute of Finance, 1988. Jack Schwager interviews 16 of the top traders in the world (and he also interviewed me.)
This book, like no other until its sequel, really elucidates what’s important for trading success. I’ve always said that trading success consists of the commonalities of what great traders do and how they think. And if you want to learn that, then this book is the place to start. Find this book on Amazon here.
6) Schwager, Jack. The New Market Wizards. New York: Harper Collins, 1992.
There are a lot more than 16 great traders and Schwager presents some more of them in this classic book. I personally think the William Eckhardt’s interview alone is worth the price of the book. Find this book on Amazon here.
7) Wilder, Wells. New Concepts in Technical Analysis. Greensboro, NC: Trend Research, 1978.
This is the oldest book on my list and I’ve included it because it is the original presentation of some of the classical tools of trading including ADX, ATR, and many other classics. If you are not familiar with these concepts, now is the time to start and this is the book to start with. Find this book on Amazon here.
Books Authored by Van Tharp
8) The Definitive Guide to Position Sizing Strategies: How to Evaluate Your System and Use Position Sizing to Meet Your Objectives. 2nd ed Cary, NC: IITM, 2013.
I think this one is a new classic. It includes how to measure the quality of your system objectively, no matter what style of trading you have or what instruments you trade. It includes everything you could possibly want to know about how to use position sizing, depending upon the quality of your system, to meet your objectives. It’s that simple and I’ve very excited about it. Only available through VTI.
9) Trading Beyond the Matrix: The Red Pill for Traders and Investors. Cary, NC: Van Tharp 2013.
I can say without a shadow of a doubt that this is my favorite, individual book that I’ve written. My goals with Trading Beyond the Matrix were to write the ultimate psychological book and to show the key inputs and outputs of successful traders: what people did and how they did it, then the results were. It’s my belief that if someone thoroughly studied all of the information in this book and had the discipline to follow through on the actions, they would be successful in the markets. Find this book on Amazon here. Find this book from VTI here.
10) The Peak Performance Course for Traders and Investor (5 books I’ll count as one). Cary, NC: Van Tharp, 1989.
When I developed the Investment Psychology Inventory to measure strengths and weaknesses of traders, people started saying, “I totally agree with your analysis, but how can I use this information to improve my trading.” As a result, I wrote the home study course over a five year period to do just that. The course should be must reading for anyone who is serious about trading or investing. And if there is a number one choice among the all of these books, this set is it. Learn more here.
11) Super Trader: Make Consistent Profits in Good and Bad Markets. Expanded Edition New York: McGraw-Hill, 2010.
12) Trade Your Way to Financial Freedom, 2nd Edition. New York: McGraw-Hill, 2007.