I wanted to share a post on books that I recommend. There are many terrific books on markets and trading.  However,  I recommend these books because I still remember their profound impact on my development as a student of the market–being a student of the market is always the base from which I write. These books provide the context in which everything else I read gets processed.

Long term Slopers have seen me recommend and/or quote from these over the years.  My hope, too, is that this post will engender some discussion from the Slope community to proffer their own suggestions for books that have shaped their development as a market participant.

Importantly, books are like people: some settle better with our personalities than others.  Accordingly, your mileage (enjoyment) might vary from mine.

• Psychology of the Stock Market,
  G. C. Selden: A 1914 copyright date reminds you as you reading it that
  the more things change, the more they stay the same. Though I recommend
  your buying this slim volume, it can be downloaded from Google books here. While many recommend Reminiscences of a Stock Operator, all of the pith of that book can be found in this slim volume.

• Secrets to Profiting in Bull and Bear Markets,
  Stan Weinstein. The charts in the book are not of the quality that our
  contemporary eye would hold them to. I wished the book would get
  updated. But this book is the best "must read" for new
  investors/traders. The book does a great job codifying do's and don'ts–basically it helps you to minimize 'stupid stuff'.  My only regret is that I didn't read this book in my first year of trading.

• The Nature of Risk,
  Justin Mamis. This book will inform your thinking about risk in the
  market and cultivate an understanding of time risk, price risk and
  information risk. I realized from this book that my expectations of risk are counter-intuitive to what I thought.

(Side note: I read Weinstein long before
I discovered Mamis. And in reading Mamis, I was struck that Weinstein's
book spoke about similar principles. I later learned that Weinstein
became the editor of Mamis's The Professional Tape Reader. For fans of
Helen Meisler, she was mentioned in the forward to one of Mamis's
books. He was her mentor–"the very best mentor one could have.")

I'm now going to add a fourth book to the the trio above:

• Beating the Stock Market,
  R. W. McNeel. Another oldie–1924. It's a slim volume that reminds us
  that while the market seems complicated, it really isn't. I will
  forgive his chapter on Women, Poor Losers.

I particularly
recommend these older books to people prone to thinking about the
market as something rigged against them by ranting against the
proverbial "They". Both McNeel and Selden's books address this sinister
"They". Both authors opine, and I paraphrase, that it is the hobgoblin
of minds that do not understand the speculative process. I believe them
to be correct.

Best to free our minds of such shadows. The greatest force that prevents our being successful in the market is ourselves.

I'll leave you with a fitting phrase from Selden:

(The photo is of Minnah.)

A few days ago, I finally finished reading Evidence-Based Technical Analysis. This book was part of the required reading for the Chartered Market Technician examination, but since only a portion of the book was required for the test, I had never read the whole thing. I decided to do so, and although I didn't really learn anything practical from it for my own trading, it was an interesting read nonetheless.

The book's principal message is that the vast majority – – practically all, really – – of technical analysis is a big, steaming pile o' crap since it isn't based on the scientific method. I found it curious that this book was required by the CMT since the author seems to diss probably 95% of what the CMT membership uses as the basis for their own analysis and trading. It would be sort of like the Catholic Church requiring its membership to read The God Delusion.

The book's message shouldn't be dismissed, of course. The author puts his arguments out there with force and logic, and it is a very reasonable premise. My take on it is that he believes any method that doesn't conform to the rigors of the scientific method (being testable, verifiable, refutable, etc.) is no better than reading goat entrails. The author takes particular aim at the entire realm of Elliott Wave; I won't detail the image that came to mind as I read the author's views about Elliott Wave, but it definitely involved a stack of EW material on the ground and the author unzipping his fly to relieve himself.

In any event, if you're of a scientific or statistical frame of mind, you will probably love the book.

Just about the most different volume I can imagine from the above is the new biography of George Carlin, Last Words. Regular Slopers know that George has been a long-time hero of mine, and although I'm just one-third of the way through this book, I imagine he'll be promoted to Idol by the time I'm done reading it. I am absolutely loving reading this book, and I can tell the final two-thirds will be just as much of a treat. If you're a Carlin fan, you should get it; it's really marvelous, and these days, I am really appreciate of anything that can put a smile on my face.