The best books about speculation

9 authors have picked their favorite books about speculation and why they recommend each book.

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What I Learned Losing a Million Dollars

By Jim Paul, Brendan Moynihan,

Book cover of What I Learned Losing a Million Dollars

It is a shame the author of this book died in the 9/11 World Trade Center terrorist attack because I always wanted to hear more from him. As with most of the books on this list, for me the details of what he did (did he enter with moving averages? How did he apply stochastics to his entry signals? Etc.) are not nearly as important as his mental state of mind. What did he feel like losing $1 million? How did he recover mentally? For me, being a good trader involves dealing with losses, and this book does a superb job of detailing how one trader did just that.


Who am I?

I have been trading for over 30 years now, and I was lucky to be one of the part-time “hobby” traders to be successful enough to trade full time. Along the way, I was a 3-time trophy winner in the world’s premier real time, real money futures trading contest. My passion is trading, both for my personal accounts and in assisting my students with their trading. While I always say “trading is the hardest way to make easy money” this field is my lifelong passion.


I wrote...

Entry and Exit Confessions of a Champion Trader: 52 Ways A Professional Speculator Gets In And Out Of The Stock, Futures And Forex Markets

By Kevin J. Davey,

Book cover of Entry and Exit Confessions of a Champion Trader: 52 Ways A Professional Speculator Gets In And Out Of The Stock, Futures And Forex Markets

What is my book about?

Are you looking for trading entry and exit ideas for your trading strategies? If so, this book is just what you need. This informative guide includes 41 entry ideas, 11 exit ideas, and code in Tradestation format and plain English for each (NinjaTrader 7 and 8 code available in the complimentary Book Bonuses described in the book).

Each entry and exit has been used in actual strategies by Champion trader Kevin J. Davey. Also included are detailed steps for how best to incorporate these entries and exits into your own trading. Start building strategies today with these fully described entries and exits!

Algorithmic and High-Frequency Trading

By Alvaro Cartea, Sebastian Jaimungal, Jose Penalva

Book cover of Algorithmic and High-Frequency Trading

Finally, for those who are not afraid of math, they should read this book because there is a lot of heavy-duty math. The good news for the rest of us is you can ignore all the math and still get a lot out of it, especially knowledge about market microstructure and how to find the theoretically optimal trading strategies given some assumptions about the price dynamics. Even if you don’t want to or can’t solve those darn stochastic differential equations, you can still implement a numerical approximation. At the minimum, you will learn common trading lingo such as “walking the book” or “the ITCH feed”.


Who am I?

A noted quantitative hedge fund manager and quant finance author, Ernie is the founder of QTS Capital Management and Predictnow.ai. Previously he has applied his expertise in machine learning at IBM T.J. Watson Research Center’s Human Language Technologies group, at Morgan Stanley’s Data Mining and Artificial Intelligence Group, and at Credit Suisse’s Horizon Trading Group. Ernie was quoted by Bloomberg, the Wall Street Journal, New York Times, Forbes, and the CIO magazine, and interviewed on CNBC’s Closing Bell program. He is an adjunct faculty at Northwestern University’s Master’s in Data Science program and supervises student theses there. Ernie holds a Ph.D. in theoretical physics from Cornell University.


I wrote...

Quantitative Trading: How to Build Your Own Algorithmic Trading Business

By Ernest P. Chan,

Book cover of Quantitative Trading: How to Build Your Own Algorithmic Trading Business

What is my book about?

Can a robot take over your trading while you sip Tequila at the poolside? This book will show you how. You only need rudimentary programming skills, a tiny dose of math, and a healthy dose of grit.

In the newly revised Second Edition of Quantitative Trading: How to Build Your Own Algorithmic Trading Business, I show you how to apply both time-tested and novel quantitative trading strategies. You’ll discover new case studies and updated information on the application of cutting-edge machine learning investment techniques, as well as updated back tests on a variety of trading strategies, which included Matlab, Python, and R code examples. You will also find a guide to selecting the best traders and advisors to manage your money.

Winning the Loser's Game

By Charles Ellis,

Book cover of Winning the Loser's Game: Timeless Strategies for Successful Investing

This book is a classic. It starts with the observation that only a handful of tennis players in the world have the talent and expertise to play to win. For everyone else, tennis is a loser’s game – they simply don’t have the talent to play an attacking game. Instead, they must avoid losing. The same applies to investing. Only a few truly gifted and experienced investors can play to win at investing – picking stocks, timing the market, etc. Everyone else, including the majority of advisors, fund managers, and stockbrokers should be defensive – they should invest to avoid losing at this game.


Who am I?

Investing in the share market appears to be a bewildering, constantly shifting, extremely noisy, and busy world – one best left to the experts. Fortunes can be made but, equally, fortunes can be lost – with devastating results for those on the receiving end. And yet there are a few, simple, timeless principles to investing in the market successfully – and, ironically, those principles – known collectively as index or passive investing – will be more successful than all the noisy, busy stuff put out by the industry. In writing our book, this is what we would like as many people as possible to know. It’s not about being smart.  


I wrote...

It's Not about How Smart You Can Be. It's about How Wealthy You Can Be.: Make the Most of the Market

By Mark Varder,

Book cover of It's Not about How Smart You Can Be. It's about How Wealthy You Can Be.: Make the Most of the Market

What is my book about?

This visually entertaining, one-hour read will convince you that low-cost, buy-and-hold index investing is not only the easiest way to participate in the stock market but also the way to make the most of it. 

The Three Skills of Top Trading

By Hank Pruden,

Book cover of The Three Skills of Top Trading: Behavioral Systems Building, Pattern Recognition, and Mental State Management

Professor Hank Pruden's book covers a more holistic perspective as he develops elements of system building, pattern recognition, and mental state discipline.

In the technical section he teaches us key concepts of the Wyckoff Method such as the protocolization of the development of accumulation and distribution structures through phases, a fundamental contribution to the Wyckoffian community.


Who am I?

I am Rubén Villahermosa, independent trader and author. My logical and rational mind led me to question the why of market movements, which allowed me to learn the principles of the Wyckoff method. I have deepened in the study of the interaction between supply and demand through high-level Technical Analysis tools such as Wyckoff, VSA, Price Action, Volume Profile, and Order Flow; knowledge that I share through my books from principles of honesty, transparency, and responsibility.


I wrote...

The Wyckoff Methodology in Depth

By Rubén Villahermosa,

Book cover of The Wyckoff Methodology in Depth

What is my book about?

Are you tired of losing money in the stock market? Have you tried countless trading methods and none of them work? Get rid of everything that didn't work for you and learn a professional approach: The Wyckoff Method.

Ruben Villahermosa, Amazon bestseller and independent trader, has refined and improved some of the most powerful concepts of stock market trading and makes them available to you in this book so that you too can benefit.

One Up on Wall Street

By Peter Lynch, John Rothchild,

Book cover of One Up on Wall Street: How to Use What You Already Know to Make Money in the Market

In this book, Peter Lynch teaches how a common investor can get great returns from his investment in the stock market if he follows a few general investing principles and a common-sense investing approach. Lynch believes that with a little research and steady discipline, every common person can outperform the so-called investment gurus and make good returns. He suggests that many great investments could be right under their nose, if the investor is ready to do some research. Most people just have to look around the place where they work or the spots where they visit to grab those opportunities. A common person is exposed to many interesting local companies and products years before professional investors would even hear of them. If these investors find and invest in these growing local companies, they can make handsome returns.


Who am I?

I am the Founder of Stellar Wealth Partners, a SEBI-registered Research Analyst firm and small case manager for investors in the Indian stock market. I am the author of the international best-seller on value investing, The Joys of Compounding. Once a strong foundation is created for a business, owners don’t work for money. Rather, money works for them. As an investor, your money is working for you 24/7. You are becoming wealthier with each passing second, alongside the increasing intrinsic value of your businesses. An investor builds earnings power through a business ownership mindset. 


I wrote...

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning

By Gautam Baid,

Book cover of The Joys of Compounding: The Passionate Pursuit of Lifelong Learning

What is my book about?

Value investing is not just a system for success in the market. It's also an intellectual toolkit for achieving a deeper understanding of the world. In The Joys of Compounding, Gautam Baid builds a holistic approach to value investing and philosophy from his wide-ranging reading, combining practical approaches, self-cultivation, and business wisdom. Baid integrates the strategies and wisdom of preeminent figures whose teachings have stood the test of time. Drawing on the work of investing greats like Warren Buffett, Charlie Munger, and Ben Graham, as well as philosophers and scholars, he artfully interweaves the lessons learned from his many teachers. Baid demonstrates their practical applications in the areas of business, investing, and decision making and also shows that these ideas can be applied to one’s own life with just as much reward.

Capital Returns

By Edward Chancellor (editor),

Book cover of Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15

Capital Returns is a comprehensive introduction to the theory and practical implementation of the capital cycle approach to investment. Chancellor says a capital cycle consists of two phases: ‘expansion,’ where the industry production/servicing capacity is increased, and ‘contraction’ where the capacity is reduced by selling assets. With excess profitability, a company or industry’s returns start increasing. This excess profitability attracts new entrants and competitors into it and as they start investing, it results in increased capacity, which leads to a decline in profit, and thus, businesses have to exit capacity and consolidate. When such businesses exit, there is reduced investment and, hence, lower supply, which in turn leads to an increase in profits. Chancellor believes investors who can understand this aspect of the capital cycle can take advantage of the change in the situation and earn good returns.


Who am I?

I am the Founder of Stellar Wealth Partners, a SEBI-registered Research Analyst firm and small case manager for investors in the Indian stock market. I am the author of the international best-seller on value investing, The Joys of Compounding. Once a strong foundation is created for a business, owners don’t work for money. Rather, money works for them. As an investor, your money is working for you 24/7. You are becoming wealthier with each passing second, alongside the increasing intrinsic value of your businesses. An investor builds earnings power through a business ownership mindset. 


I wrote...

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning

By Gautam Baid,

Book cover of The Joys of Compounding: The Passionate Pursuit of Lifelong Learning

What is my book about?

Value investing is not just a system for success in the market. It's also an intellectual toolkit for achieving a deeper understanding of the world. In The Joys of Compounding, Gautam Baid builds a holistic approach to value investing and philosophy from his wide-ranging reading, combining practical approaches, self-cultivation, and business wisdom. Baid integrates the strategies and wisdom of preeminent figures whose teachings have stood the test of time. Drawing on the work of investing greats like Warren Buffett, Charlie Munger, and Ben Graham, as well as philosophers and scholars, he artfully interweaves the lessons learned from his many teachers. Baid demonstrates their practical applications in the areas of business, investing, and decision making and also shows that these ideas can be applied to one’s own life with just as much reward.

Trading from Your Gut

By Curtis Faith,

Book cover of Trading from Your Gut: How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader

Subtitled How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader, this book is written by one of the original Turtle Traders and draws on Curtis' experience in developing a whole-brain approach to trading. As such, it is a quantum leap from the run-of-the-mill trading book, and very worthy of some study.

I was privileged to get a review copy which so impressed me that I provided inside and back cover endorsements. I've only done so with a couple of other books, which should show you how greatly I believe in what he is presenting.


Who am I?

I came from a left-brained family, with my father a bank Forex manager and my mother in the tax office before motherhood. I've always been mathematically minded and went into mechanical engineering before my second career in trading and finance. But saying this sustains the fallacy that you have to have a head for numbers to trade. That is nothing like the truth, and I hope my last book pick shows that I have learnt and come a long way from my initial beliefs. Trading is anything but mathematical, mechanistic, or even natural, you have to study and learn new ways of thinking and doing, and you can only succeed if you are open to this.


I wrote...

Mastering Technical Analysis: Strategies and Tactics for Trading the Financial Markets

By Alan Northcott,

Book cover of Mastering Technical Analysis: Strategies and Tactics for Trading the Financial Markets

What is my book about?

A comprehensive guide to all aspects of technical analysis, Mastering Technical Analysis sprang out of a massive trading course I undertook in collaboration with an English trader/educator. I was to provide all the written and video content, and he was doing the final production, marketing, and support. Unfortunately, he became ill and could not continue, so the "Masters Course in Technical Analysis" was never produced.

After some medical issues myself, I resurrected the content and produced this book. After months of research and writing I was determined that it would not be wasted, and I also saw a need for a complete tutorial and reference work that included the latest trends and thoughts on the topic.

Trader Vic--Methods of a Wall Street Master

By Victor Sperandeo, T. Sullivan Brown,

Book cover of Trader Vic--Methods of a Wall Street Master

This book is a classic and the best of the many books written by traders describing trading situations and what they did to conquer the market. Sperandeo delivers concise, specific definitions of how he defines and uses trends with some of the clearest charts you will ever see. I find myself going back to some of the same pages over the years in which he discusses how to tell if a trend is undergoing a correction or is an authentic reversal.


Who am I?

Economics isn't really a good starting point for financial market analysis for the simple reason that its models are wildly inaccurate. As behaviorial economists like Daniel Kahneman have been showing, irrationality and the inability to measure risk properly are a very big component of the investment and trading decisions. But statistical risk management is also sloppy when applied to human behavior because people are not objects that reliably behave the same way under similar circumstances. So when you read an economist about markets or an engineer about risk management, you're missing a lot of the story. In the end, technical analysis is fascinating because how and why humans behave is an enduring mystery.


I wrote...

Technical Analysis For Dummies

By Barbara Rockefeller,

Book cover of Technical Analysis For Dummies

What is my book about?

Technical Analysis for Dummies covers the universe of techniques that help traders make gains and avoid losses. These techniques are based mostly on arithmetic but which ones you choose and how you use them makes a big difference in winning or losing. You can design a winning system to get an advantage—and still go broke if you hang on too long (greed) or get out too early (fear). 

In order to trade well, you need to review all the technical methods. Here’s the blessing and the curse—every single technique works. Selecting the techniques that are a fit for your personality and lifestyle is a lot harder. You may think you know yourself going in, but chances are you will be surprised at what fits you best.

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